Budget 2024/25: economic questions, infrastructure answers
RPS Executive Director, Arthur Stamatoudis explores what Australia’s 2024/25 Budget means for the infrastructure industry.
16 May 2024
Infrastructure
Energy transition
Arthur Stamatoudis
Market capacity assessment for infrastructure delivery in Western Australia
Exploring market readiness
With a huge pipeline of infrastructure projects across Australia’s energy, defence, water, housing and transport sectors, competition for skills and resources is hotter than ever. This competition is often felt most keenly in Western Australia due to its relative isolation, high level of competition for skilled labour between the resources industry and other sectors, and general challenges with attracting skilled labour migration from other states.
To support a confidential client to assess how the Western Australian market could cope with the additional demands of its long-term pipeline of infrastructure investments, RPS’ economics team was engaged to complete a detailed, scenario-based analysis of delivery phase risks and opportunities, including:
- Labour supply baselining
- Project pipeline analysis
- Drivetime catchment area analysis
- Supply and demand assessment
- Supply chain evaluation
- Scenario analysis of labour demand
- Wage impact quantification.
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Understanding capacity opportunities and gaps in Australia's west
Evaluating a wide range of metrics and long-term trends, our economists assessed labour supply and demand in relation to the client’s projected project requirements, broader pipeline, and local supply chain characteristics. From there, we provided detailed advice on the construction industry's likely capability to deliver projects planned for the client’s portfolio.
Our evidence allowed the client to understand capacity opportunities and constraints under different market scenarios, including:
- Potential labour shortages due to cross-sector competition, and proactive strategy options to help secure necessary people and skills.
- Potential labour or supply chain challenges including inter-dependency bottlenecks to strategically inform program sequencing and resource allocation.
- Potential financial impacts of market constraints like wage inflation and supply chain disruptions to support effective planning and management of program budgets.
- Mitigation strategies that could reduce risks related to labour and supply chain shortages.
Through evidence and advice, RPS has supported the client to understand how “ready” the Western Australian market would be to deliver initiatives in its pipeline, and how much capacity gaps could cost at the project, program, and portfolio level.
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