Welding and other trades are still impeded by a lack of skills and will need government support and investment to build the capacity needed for the energy transition.
Weld Australia’s 2023 member survey highlighted the range of challenges facing the welding and fabrication industry, including severe skills shortages and rising material and labour costs, which would limit the government’s ability to effectively transition to renewable energy.
Completed by more than 130 companies across the country, the survey revealed that 60 per cent of respondents expected labour shortages to inhibit their near-term growth and 45 per cent confirmed that labour shortages were their main concern, followed by rising material costs. Notably, half of respondents were operating at 80 per cent capacity or less, with a lack of skilled workers the most commonly cited reason.
This was despite nearly half of respondents already having a pipeline of work that extended for six months or longer, a necessary choice to mitigate worker shortages, while another 33 per cent had a pipeline extending between three and six months. Compared to the 2020 survey, this represents a marked increase – the most common answers in 2020 were less than one month (28 per cent), one month (19 per cent), and two months (16 per cent).
Only 47 per cent of respondents indicated their gross profit margin had increased over the previous 12 months, despite the rising overheads, while many expected even higher materials prices (82 per cent) and higher energy prices (85 per cent).
Geoff Crittenden, Chief Executive Officer at Weld Australia, said with a considerable volume of work being on-shored and a greater sentiment in the market to ‘buy local’, Australian fabrication companies are so strapped for skilled welders that they are operating well below capacity.
“They are being forced to turn down jobs because they simply don’t have the manpower to complete the work. “How then, will Australian fabricators cope with the influxof work required to make the federal government’s renewable energy revolution reality?”
Australia’s legislated emissions reduction targets of 43 per cent by 2030 and net zero by 2050 will require new infrastructure to achieve and will see existing renewable generation capacity of 64 gigawatts grow to more than 218 gigawatts by 2050.
This additional capacity is expected to comprise about 90 gigawatts of wind, 39 gigawatts of solar, 19 gigawatts of hydro, and 36 gigawatts of battery storage. To construct just the wind energy component, more than 11,000 wind towers will need to be built, each requiring 500 tonnes of plate steel for onshore towers and 750 tonnes for offshore.
Moreover, the Australian Energy Market Operator (AEMO) has estimated more than 10,000 kilometres of new transmission lines will be needed to connect this new generation, which would require 25,000 transmission towers (at 30 to 60 tonnes of steel per tower) to be constructed.
Wind tower manufacturing in particular offers many opportunities for local manufacturers, including extending the lifespan of fabrication facilities set up for onshore wind as they transition to offshore wind.
These facilities can also be multi-purpose, being used to manufacture pumped hydro pipes, piling (for ports and bridges), and other large-scale heavy round manufacturing.
Along with a logistics network for the movement of raw materials and tower sections, Weld Australia noted there were also downstream benefits for local suppliers of welding consumables, electrical components, safety equipment, painting consumables, internal components like platforms and handrails, hire equipment and facility maintenance.
Crittenden said: “While our governments can wish, and hope, and make public pledges about Australia’s transition to renewable energy, at the moment, we simply do not have the sovereign manufacturing capability to make this a reality.”
While the majority (62 per cent) of respondents supported the emissions reduction targets, 75 per cent believed that Australia’s governments. Moreover, 70 per cent of respondents said they would support a federal government package to help employees transfer from carbon-intensive to carbon-free industries.
To overcome these challenges in the absence of further government support, 60 per cent of respondents indicated they were training or upskilling their existing staff, 55 per cent were either increasing wages or improving employee benefits, and 32 per cent were leveraging different talent pools, such as apprentices, females, and prisoners.
Welders strongly support investment in TAFE to help mitigate labour shortages, with 21 per cent supporting free TAFE for apprentices, 14 per cent supporting increased funding to upgrade TAFE facilities, and 64 per cent supporting both options. Additionally, 57 per cent said they were either investing in automation and technology, or changing their operational processes, while many also made substantial sustainability improvements in the 12 months prior to May 2023.
These include installing LED or sensor lighting (80 per cent, up from 53 per cent in 2022); waste reduction programs (78 per cent, up from 46 per cent in 2022);recycling, up-cycling and repurposing programs (75 per cent, up from 46 per cent in 2022); and implementing a net zero carbon plan (50 per cent, up from 13 per cent in 2022).
A key part of alleviating Australia’s shortfall of welders is to increase gender diversity in the trades, and encourage women to become welders. Women account for less than 1 per cent of Australia’s overall welding and fabrication sector, while making up on average 48 per cent of the country’s entire workforce.
Weld Australia has called for the government to implement a proactive, targeted approach that engages and recruits women into trades, implements innovative trade training programs designed specifically for women, and sets measurable gender diversity targets on government-funded projects.
Crittenden explained there were significant economic benefits for women in welding, from increased choice and availability of jobs, through to improved job security, higherthan- average pay, and ample opportunities for progression and promotion. As an example, he pointed to the Victorian government’s Building Equality Policy (BEP), in effect since the beginning of 2022, which aims to disrupt gender stereotypes in the country’s most male-dominated industry.
The BEP applies to new government projects and mandates female representation in at least 3 per cent of each trade role; 7 per cent of each non-trade position; and 35 per cent of management, supervisor and specialist labour roles. It also mandates that 4 per cent of labour hours for apprentices and trainees are performed by women.
Crittenden said if the federal government mandated a policy similar to Victoria’s BEP, then the necessary recruitment and training programs would follow.