A CHRONIC shortage of skilled labour is set to act as a permanent constraint on Australia’s growth.
We are moving from an economy where growth has been limited by demand to one where growth will be limited by resource availability, according to BIS Shrapnel’s Economic Outlook bulletin.
“Australia has entered a new era of constrained growth. Businesses are already grappling with the problems of tight capacity, infrastructure bottlenecks and an acute shortage of skilled labour. And both businesses and government are moving to address these constraints through new investment. But the real, enduring problem is going to be the shortage of skilled labour,” says BIS Shrapnel senior economist, Matthew Hassan.
“Surging investment will go some way towards relieving the issue of tight capacity and inadequate public infrastructure, but will do little to fix what is set to become a fundamental shortage of skilled labour.
“And, over the short term, surging investment will even add to problem by pushing up demand.