The Big Build is Opening Doors For Small Businesses (With One Catch)

Billions of dollars are flowing through Australia’s infrastructure pipeline and smart SMEs have the chance to cash in.

A record $242 billion in major projects are slated over the next five years, according to Infrastructure Australia’s 2025 Infrastructure Market Capacity Report – up $29 billion since last year.

Leading the growth is a surge in energy transmission and housing projects, while transport infrastructure accounts for more than half the total, at $129 billion.

“With community buy-in, this mammoth investment presents a once-in-a-generation opportunity,” said Infrastructure Australia CEO Adam Copp.

But There Is A Catch And It’s A Big One

“This added demand will not come without challenges for the market. Productivity growth remains sluggish, while worker shortages present a significant risk to the delivery of projects,”  Mr Copp conceded.

The report estimated Australia’s current infrastructure workforce at 204,000, which is 141,000 fewer than required. The shortage is expected to blow out to 350,000 by 2027.

And it’s not just tradies and labourers in demand. Architects, scientists and engineers are also hard to find.

Even More Workers Will Be Needed In The Bush

The shortage will be hardest felt in ten regional hotspots in New South Wales, Queensland and Tasmania. These areas are experiencing public investment growth of at least 200 per cent, largely in utilities projects.

The report recommended governments set up a nationally-coordinated construction workforce training program as a matter of priority.

Employment Hero Global Head of Talent, Kate Jolly said there were steps employers could take to retain great workers and attract new ones.

“It’s tough when costs are through the roof, but investing in apprenticeships and upskilling will typically pay off. Experienced staff are also more likely to stay when they have clear and flexible career pathways,” Ms Jolly said. “I’d encourage business owners to consider adopting AI and digital tools where they make sense. Some tasks are more automatable than others – focus your technology investments on the things that can be automated, and free up time for the things that can’t.”

Businesses Must Do More With Less 

An alternative to closing the workforce gap was boosting productivity, the report found. 

But businesses had been slow to embrace innovation. 26% of firms surveyed had made no investment in digitalisation in the past year and small business lagged behind in adoption and awareness of AI tools.

That’s despite the potential use of AI in project estimation and tendering, scheduling and resource planning, safety monitoring, predictive maintenance to minimise downtime and AI-driven HR, payroll and finance tools.

How To Find The Most Lucrative Growth Pockets

Strategic SMEs could take note of potentially lucrative growth opportunities hidden in the report.

It predicted a boom in demand for low-emission and recycled construction materials and in decarbonisation efforts more broadly. It also forecast a rise in modern construction methods, such as pre-fabricated dwellings and components, to provide a more efficient way of building.

Said Mr Copp: “We need to start investing in innovation rather than fixating on delivering at the lowest possible cost.”