My wife reckons two are easier than one and three is easier than two. They start to look after each other, a process of socialization. Its easier if you leave the socialization to the kids.
Great article. Love the explanation re the breastplates.
Good idea in relation to the apprentices.
Why not let the owner builders into the act. That's what happened post WW2 when lots of guys got hold of a sheet of metal, a shovel and made cement bricks. You could hold a brick making party with your mates of a Saturday morning instead of going surfing. A lot can be accomplished if you de-regulate and allow people in to experiment and make their own mistakes. Mate, we are over-governed. It's time to throw off the shackles.
Agree with all said Erl though I wonder how impactful it would be if we returned to post war era regulations. I am personally useless with anything tradie related haha though I can help with demolition!
Don't see why we need to accelerate PR applications for tradies. Our neighbours in ASEAN and the Gulf monarchies have a decently functional guest worker program for construction labour already. We can copy their model, preferably Singapore's model and UAE's one since we actually value human life or at least pretend to.
We already have a guest worker program for the agriculture industry. We couldn't screw the consumer there because agriculture is a tradeable industry while construction is not.
I think you’re right that ultimately this is where we will need to go (or start cancelling projects en-masse). We’d still need to make a lot of changes to planning frameworks etc to allow for mining camp style accommodation, because the rental vacancy rate is still too low.
I read your post on labour shortages in construction (In Australia as I understand it), well I have one request, don’t go trying to nick what little skilled labour we have in the UK. We can’t afford to part with any of it.
In fact a report by one of the Great and the Good of the building world came out the other year saying that the average age of operatives (tradies to you) was 58. Young people simply don’t want to work on building sites. Here in the UK part of that is about our weather (have you heard about British weather?) No-one wants to spend their days on muddy building sites with toilets that are cleaned every week if they are lucky, and no on -site catering, so operatives end up buying fatty pastries from Service stations or mini-markets on their way to work.
True, Health & Safety has improved immensely in the last few years. Here we still have an industry that is to coin a phrase; “sub-contractorised to death” Main Contractors, and large house builders (developers) barely employ anyone. On site their direct employees will be Site Manager, Finishing foreman, and one or maybe two labourers whose main job is sweeping up round the site portacabin and locking the gates at night. They are ably assisted by one or two Quantity Surveyors, whose job is to screw as much money out of the client (in contractors) while simultaneously preventing the subcontracting firms from doing the same to the main contractor or developer.
The sub-contractors avoid employing too much direct labour by means of using labour agencies or employing “self-employed” tradesmen. The whole industry is a race to the bottom in terms of cost, and consequently in terms of build quality.
For contractors, this makes sense of a kind, because they typically pay the sub-contractors a week after they receive payment from the employer. Thus, their only need for working capital is to pay their head office and site staff, sub-contractors bear the burden of the working capital for the actual works itself. This means we have very thinly capitalised “main contractors” who are usually short-lived as a small number of projects turning loss-making soon absorbs all their meagre capital.
Of course, for building homes for sale this model actually makes no sense whatsoever, the developer doesn’t get monthly stage payment from the homebuyers. (Well in France they do, but that’s a whole different ball game). So not developing their own labour force, and thus their own workforce’s skills is presumably because they actually like producing sub-standard, defect riddled homes. There is simply no cash-flow of capital utilisation benefit to them.
Building homes off site doesn’t generally work. Even in Japan, where the likes of Toyota have got into the factory-built homes business they can’t compete on cost. Europe has some superb off-site manufactured homes firms notably Huff https://en.wikipedia.org/wiki/Huf_Haus . There may be a middle way, if the highly serviced elements of a house could be built off-site and wrapped around with walls / floor onsite, that might work.
However, I believe that we will not start making an impact on this problem until we reform the whole industry, persuade some of the best sun-contractors to work in joint ventures and put the main contractors out of business or make them up their game, particularly in how their employees (and they will need to be employees) are treated, in terms of continuity of employment, sick pay, training, site welfare facilities, pensions, and most fundamentally; respect.
Thanks Mark great thoughts. I wish I knew more about the construction industry / modern methods of construction because I've come to believe that this is where there are the most gains to be made in terms of boosting our productive capacity.
On a side note, I lived in London for a while and I remember walking to the train in the freezing mornings past job sites with my mouth agape at the fact that people were out in the elements, building houses - so I take my hat off to anyone who does that job over there!
I think we need to strike a balance regarding "MMC". Back in the 1700's everything was made on or very near the site, including bricks, Which would be burnt for local clay. Carpenters would make sash windows up on site, which accounts for the tiny variations one finds when refurbishing some early homes in London still. Today, nobody would even dream of doing such a thing.
In the UK we now import clay bricks from Belgium and Holland, roof trusses are made off site as are all the doors and windows, kitchen units, door frames, roof tiles etc. So we already have a lot of "OSM". What we are really looking for is to minimize site labour even further.
Some years ago I had eight homes build in Hemel Hempstead (UK) by a German firm who prefabricated all the wall and floor panels, complete with insulation and a drywall lining, 2 No, 4 bedroomed houses, 2 No, 3 bedroomed houses, and 4 No, 2 bedroomed flats were prefabricated in Germany and brought over to the UK in three 12m trailers assembled on the foundations and finishes in six months, to an outstanding level of quality. This was about 4% more expensive than conventional construction. But worth it because of the absence of defects and consequent complaints we had from the tenants (they were for social rent).
What was really different was that the workforce who built the homes were all highly trained, the panels were made in the factory by three men all "Zimmerman" apprentice trained - its is a 5-year apprenticeship in Germany to become a Zimmerman - the same three men assembled the superstructures on site too - so they were eating their own cooking!
At the other extreme L&G a big insurer and asset manager leased a huge factory in Yorkshire, spent £68m equipping it, and then over the next four years wrote off £127m in losses on it before finally closing it down. The idea had been to make fully finished prefabricated flats using cross-laminated timber and transport them to site by truck in (as I recall) 2.9 m wide modules, as that is the widest load that can be moved on our roads without a police escort.
One story I heard about that was after about a year of operation, as the second CEO was starting work, he held a meeting of senior staff, and the haulier. He asked the haulier's representative if 2,9, was transportable; "yes" came the reply, but is it a good idea to be so wide?" he asked, "no" came the reply. To paraphrase Oscar Wilde, One must have a heart of stone to read that without laughing.
Somewhere in the world of OSM there is a happy medium between "traditional" and "volumetric" but we haven't yet found it.
A good article, and nice to see someone writing from an Australian perspective. I definitely read too many American substacks.
If I may push back slightly on roads, if the roads are twice as big, and they are still equally busy, then that means twice as many people are finding it worthwhile to go somewhere. Maybe to a higher productivity job, maybe to a friend's house or maybe to entertainment. The goal of more roads shouldn't be "reduce traffic" but instead "get people where they want to go". The roads being busy is an indication that's working wonderfully.
Thanks for reading Andrea - I'd love to see some real research done on this, because just anecdotally, I know so many people who would change to a trade if as you said, there was a smooth way to do it.
Thanks so much for sharing, it's really appreciated. I've had to take my name off the blog for professional reasons, so I have precious few ways of sharing it!
Great article. I would frame it a slightly different way. Labor has gained power federally and across the Eastern seaboard, and their leaders are starting to repeat YIMBY talking points. Unfortunately the upzoning seems to be concentrated around a few train stations, but it is a good start. Now the blockage becomes the labour market, as you point out. But Labor also carved out construction workers from its skilled migration reforms https://www.afr.com/property/residential/foreign-tradies-wanted-to-fix-housing-shortfall-20240108-p5evrb, presumably to placate the CFMEU. I would like to think the media would shame Labor into fast-tracking more construction workers, but the CFMEU is a pretty big donor. So the way forward I think is a) Labor should pass broad based upzoning in all the states it holds, and boost the apprenticeship system. b) the Liberals should fast track construction worker visas when they get in in say 2028. It's pretty messy, but I also don't think most Australians really want to go back to an economy without immigration.
Wow I didn’t know that Labor took construction labour off the skilled migration list - that is absolutely mental! I hope you’re right about Labor heading towards some upzoning but I wouldn’t hold your breath on that - I think they still correctly understand this to be political suicide. There’s been lots of talk about this for years but it never seems to go anywhere. I’m anticipating a slight tweak on your theory where Labor will upzone LNP seats and then LNP will upzone Labor seats. Things need to get worse before they get better unfortunately, which really sucks in this situation because any impactful policies will take at least 5 years to start taking effect.
A brilliant article about a terrible predicament! My only quibble is that I am personally uncertain about how truthful it is that we have a lot of "Full employment", considering that a lot of governments and economists have no trouble massaging statistics to make things look better than they really are.
I am also uncertain about when, or if, our government will implement your suggested reforms. The sad thing is that though Labor has done some good things it is not the radical force for change some of us expected. To be honest none of the governments of the West truly are. It is somewhat eerie noticing how impossible it is for things to significantly improve for the better anymore.
Thanks for reading mate. With regard to full employment I share your frustrations / scepticism with regards to any macroeconomic statistic as it seems anyone can point to a graph that proves anything these days lol. I am fairly confident about it being true at least within the construction industry though as it is something I am coming up against regularly in my career, plus there are a bunch of other statistics that point to the same phenomenon.
With regards to federal Labor I share your exasperation. I have been so disappointed with the lack of ambition and seriousness from the policy proposals so far. You may like this article where I echo many of the same sentiments:
A great overview of the current situation. I do like your recommendations even though it feels like there has been a thousand initiatives to increase apprenticeship numbers. Are apprentice wages still awful?
Congratulations on the arrival of your young one. I’m two years ahead in that journey and while it’s exhausting, it’s also the greatest thing.
I believe there were some subsidies / incentives in place for apprentices in QLD until they recently expired which has exacerbated the situation (don't quote me on that though). But yes it may be that less and less people are going to be keen to be tradies into the future could get very interesting - a tradie supremacy of some kind? Jet-ski sales set to soar? Invest now!
Thanks for the well-wishes. I also have an almost-3 year old so it's easier in some ways and harder in others. Easier in that I'm less worried about accidentally killing them and understand that every awful period will inevitably end and be replaced by another period that is also awful, but at least in a different way. Harder in that more hands are inevitably required for 2. But yes as you said - the greatest thing.
My wife reckons two are easier than one and three is easier than two. They start to look after each other, a process of socialization. Its easier if you leave the socialization to the kids.
Great article. Love the explanation re the breastplates.
Good idea in relation to the apprentices.
Why not let the owner builders into the act. That's what happened post WW2 when lots of guys got hold of a sheet of metal, a shovel and made cement bricks. You could hold a brick making party with your mates of a Saturday morning instead of going surfing. A lot can be accomplished if you de-regulate and allow people in to experiment and make their own mistakes. Mate, we are over-governed. It's time to throw off the shackles.
Agree with all said Erl though I wonder how impactful it would be if we returned to post war era regulations. I am personally useless with anything tradie related haha though I can help with demolition!
Necessity bring out the latent talents. You might surprise yourself.
Don't see why we need to accelerate PR applications for tradies. Our neighbours in ASEAN and the Gulf monarchies have a decently functional guest worker program for construction labour already. We can copy their model, preferably Singapore's model and UAE's one since we actually value human life or at least pretend to.
We already have a guest worker program for the agriculture industry. We couldn't screw the consumer there because agriculture is a tradeable industry while construction is not.
I think you’re right that ultimately this is where we will need to go (or start cancelling projects en-masse). We’d still need to make a lot of changes to planning frameworks etc to allow for mining camp style accommodation, because the rental vacancy rate is still too low.
I worked on farms over a summer and that type of accommodation already exists for farm workers. You see a lot of weird shit in those places.
I believe you!
I read your post on labour shortages in construction (In Australia as I understand it), well I have one request, don’t go trying to nick what little skilled labour we have in the UK. We can’t afford to part with any of it.
In fact a report by one of the Great and the Good of the building world came out the other year saying that the average age of operatives (tradies to you) was 58. Young people simply don’t want to work on building sites. Here in the UK part of that is about our weather (have you heard about British weather?) No-one wants to spend their days on muddy building sites with toilets that are cleaned every week if they are lucky, and no on -site catering, so operatives end up buying fatty pastries from Service stations or mini-markets on their way to work.
True, Health & Safety has improved immensely in the last few years. Here we still have an industry that is to coin a phrase; “sub-contractorised to death” Main Contractors, and large house builders (developers) barely employ anyone. On site their direct employees will be Site Manager, Finishing foreman, and one or maybe two labourers whose main job is sweeping up round the site portacabin and locking the gates at night. They are ably assisted by one or two Quantity Surveyors, whose job is to screw as much money out of the client (in contractors) while simultaneously preventing the subcontracting firms from doing the same to the main contractor or developer.
The sub-contractors avoid employing too much direct labour by means of using labour agencies or employing “self-employed” tradesmen. The whole industry is a race to the bottom in terms of cost, and consequently in terms of build quality.
For contractors, this makes sense of a kind, because they typically pay the sub-contractors a week after they receive payment from the employer. Thus, their only need for working capital is to pay their head office and site staff, sub-contractors bear the burden of the working capital for the actual works itself. This means we have very thinly capitalised “main contractors” who are usually short-lived as a small number of projects turning loss-making soon absorbs all their meagre capital.
Of course, for building homes for sale this model actually makes no sense whatsoever, the developer doesn’t get monthly stage payment from the homebuyers. (Well in France they do, but that’s a whole different ball game). So not developing their own labour force, and thus their own workforce’s skills is presumably because they actually like producing sub-standard, defect riddled homes. There is simply no cash-flow of capital utilisation benefit to them.
Building homes off site doesn’t generally work. Even in Japan, where the likes of Toyota have got into the factory-built homes business they can’t compete on cost. Europe has some superb off-site manufactured homes firms notably Huff https://en.wikipedia.org/wiki/Huf_Haus . There may be a middle way, if the highly serviced elements of a house could be built off-site and wrapped around with walls / floor onsite, that might work.
However, I believe that we will not start making an impact on this problem until we reform the whole industry, persuade some of the best sun-contractors to work in joint ventures and put the main contractors out of business or make them up their game, particularly in how their employees (and they will need to be employees) are treated, in terms of continuity of employment, sick pay, training, site welfare facilities, pensions, and most fundamentally; respect.
Thanks Mark great thoughts. I wish I knew more about the construction industry / modern methods of construction because I've come to believe that this is where there are the most gains to be made in terms of boosting our productive capacity.
On a side note, I lived in London for a while and I remember walking to the train in the freezing mornings past job sites with my mouth agape at the fact that people were out in the elements, building houses - so I take my hat off to anyone who does that job over there!
The construction physics substack is pretty good.
I think we need to strike a balance regarding "MMC". Back in the 1700's everything was made on or very near the site, including bricks, Which would be burnt for local clay. Carpenters would make sash windows up on site, which accounts for the tiny variations one finds when refurbishing some early homes in London still. Today, nobody would even dream of doing such a thing.
In the UK we now import clay bricks from Belgium and Holland, roof trusses are made off site as are all the doors and windows, kitchen units, door frames, roof tiles etc. So we already have a lot of "OSM". What we are really looking for is to minimize site labour even further.
Some years ago I had eight homes build in Hemel Hempstead (UK) by a German firm who prefabricated all the wall and floor panels, complete with insulation and a drywall lining, 2 No, 4 bedroomed houses, 2 No, 3 bedroomed houses, and 4 No, 2 bedroomed flats were prefabricated in Germany and brought over to the UK in three 12m trailers assembled on the foundations and finishes in six months, to an outstanding level of quality. This was about 4% more expensive than conventional construction. But worth it because of the absence of defects and consequent complaints we had from the tenants (they were for social rent).
What was really different was that the workforce who built the homes were all highly trained, the panels were made in the factory by three men all "Zimmerman" apprentice trained - its is a 5-year apprenticeship in Germany to become a Zimmerman - the same three men assembled the superstructures on site too - so they were eating their own cooking!
At the other extreme L&G a big insurer and asset manager leased a huge factory in Yorkshire, spent £68m equipping it, and then over the next four years wrote off £127m in losses on it before finally closing it down. The idea had been to make fully finished prefabricated flats using cross-laminated timber and transport them to site by truck in (as I recall) 2.9 m wide modules, as that is the widest load that can be moved on our roads without a police escort.
One story I heard about that was after about a year of operation, as the second CEO was starting work, he held a meeting of senior staff, and the haulier. He asked the haulier's representative if 2,9, was transportable; "yes" came the reply, but is it a good idea to be so wide?" he asked, "no" came the reply. To paraphrase Oscar Wilde, One must have a heart of stone to read that without laughing.
Somewhere in the world of OSM there is a happy medium between "traditional" and "volumetric" but we haven't yet found it.
A good article, and nice to see someone writing from an Australian perspective. I definitely read too many American substacks.
If I may push back slightly on roads, if the roads are twice as big, and they are still equally busy, then that means twice as many people are finding it worthwhile to go somewhere. Maybe to a higher productivity job, maybe to a friend's house or maybe to entertainment. The goal of more roads shouldn't be "reduce traffic" but instead "get people where they want to go". The roads being busy is an indication that's working wonderfully.
Anyway I've subscribed and look forward to more.
Can confirm. Would jump into a trade if there was a smooth way for a 46 year old to do that.
Edit: Also welcome back! I'll let all my friends know to not read this latest post.
Thanks for reading Andrea - I'd love to see some real research done on this, because just anecdotally, I know so many people who would change to a trade if as you said, there was a smooth way to do it.
Thanks so much for sharing, it's really appreciated. I've had to take my name off the blog for professional reasons, so I have precious few ways of sharing it!
Great article. I would frame it a slightly different way. Labor has gained power federally and across the Eastern seaboard, and their leaders are starting to repeat YIMBY talking points. Unfortunately the upzoning seems to be concentrated around a few train stations, but it is a good start. Now the blockage becomes the labour market, as you point out. But Labor also carved out construction workers from its skilled migration reforms https://www.afr.com/property/residential/foreign-tradies-wanted-to-fix-housing-shortfall-20240108-p5evrb, presumably to placate the CFMEU. I would like to think the media would shame Labor into fast-tracking more construction workers, but the CFMEU is a pretty big donor. So the way forward I think is a) Labor should pass broad based upzoning in all the states it holds, and boost the apprenticeship system. b) the Liberals should fast track construction worker visas when they get in in say 2028. It's pretty messy, but I also don't think most Australians really want to go back to an economy without immigration.
Wow I didn’t know that Labor took construction labour off the skilled migration list - that is absolutely mental! I hope you’re right about Labor heading towards some upzoning but I wouldn’t hold your breath on that - I think they still correctly understand this to be political suicide. There’s been lots of talk about this for years but it never seems to go anywhere. I’m anticipating a slight tweak on your theory where Labor will upzone LNP seats and then LNP will upzone Labor seats. Things need to get worse before they get better unfortunately, which really sucks in this situation because any impactful policies will take at least 5 years to start taking effect.
Just to say! Not no one reads your blog — I love it!
Haha thanks mate
A brilliant article about a terrible predicament! My only quibble is that I am personally uncertain about how truthful it is that we have a lot of "Full employment", considering that a lot of governments and economists have no trouble massaging statistics to make things look better than they really are.
I am also uncertain about when, or if, our government will implement your suggested reforms. The sad thing is that though Labor has done some good things it is not the radical force for change some of us expected. To be honest none of the governments of the West truly are. It is somewhat eerie noticing how impossible it is for things to significantly improve for the better anymore.
Thanks for reading mate. With regard to full employment I share your frustrations / scepticism with regards to any macroeconomic statistic as it seems anyone can point to a graph that proves anything these days lol. I am fairly confident about it being true at least within the construction industry though as it is something I am coming up against regularly in my career, plus there are a bunch of other statistics that point to the same phenomenon.
With regards to federal Labor I share your exasperation. I have been so disappointed with the lack of ambition and seriousness from the policy proposals so far. You may like this article where I echo many of the same sentiments:
https://theemergentcity.substack.com/p/the-housing-crisis-is-an-emergency
A great overview of the current situation. I do like your recommendations even though it feels like there has been a thousand initiatives to increase apprenticeship numbers. Are apprentice wages still awful?
Congratulations on the arrival of your young one. I’m two years ahead in that journey and while it’s exhausting, it’s also the greatest thing.
I believe there were some subsidies / incentives in place for apprentices in QLD until they recently expired which has exacerbated the situation (don't quote me on that though). But yes it may be that less and less people are going to be keen to be tradies into the future could get very interesting - a tradie supremacy of some kind? Jet-ski sales set to soar? Invest now!
Thanks for the well-wishes. I also have an almost-3 year old so it's easier in some ways and harder in others. Easier in that I'm less worried about accidentally killing them and understand that every awful period will inevitably end and be replaced by another period that is also awful, but at least in a different way. Harder in that more hands are inevitably required for 2. But yes as you said - the greatest thing.
You may enjoy this article I found the other day:
https://thelivingfossils.substack.com/p/the-existential-relief-of-having