Employers expecting shortages in higher-skilled roles, particularly in construction
Workforce shortages in Australia slightly eased in the past year, according to a new report, but employers remain particularly concerned about the availability of higher-skilled talent.
Findings from the Australian Industry Group's 2026 Industry Leaders Outlook Survey revealed that 33% of employers did not experience any shortages in 2025, up from 25% in 2024.
"This reflects an easing of the labour market over the last year, which has pulled back slightly from record-level tightness," the report read.
This trend is strongly observed for lower-skilled positions, where just 35% of employers experienced a shortage, a huge drop from the 52% in 2024.
Employers who reported a shortage for higher-skilled roles also dropped to 55%, but it is a smaller decline from the 60% reported in 2024, according to the report.
More employers expect shortages
But expectations that the skills shortage would ease were very mild among employers, the report further revealed.
Some 37% of employers are expecting shortages for lower-skilled roles, while 52% are anticipating similar gaps for higher-skilled positions.
"Overall, slightly more expect to be affected by shortages in 2026 (69%) than in 2025 (67%)," the report added.
Anticipating construction shortages
Employers in the construction industry are most likely to expect shortages amid anticipated growth in output in 2026.
According to the findings, 78% of employers in the industry are expecting shortages for higher-skilled positions, while 69% are bracing for a similar situation for lower-skilled roles.
The report attributed the shortage expectations to two factors, with the first one being the "very pronounced shortages" afflicting construction trades.
"Every construction-specific occupation is currently listed as in national shortage by Jobs & Skills Australia, the only industry to face universal shortages," the report read.
The second factor is the expected continued output growth in 2026, with public infrastructure works continuing and house building expanding.
"This indicates that expectations for ongoing workforce shortages – particularly at the higher-skilled level – have become entrenched amongst industry leaders," the report read.
"While the worst of the post-pandemic shortages are now over, reported shortage rates remain high and are not expected to diminish any time soon."
Business pressures among employers
Persistent workforce shortages are just one of the pressures identified by employers in the Ai Group report.
Employers also cited the return of inflation, mounting regulatory burden, and wage costs rising rapidly.
"Persistent cost pressures – whether from inflation, workforce shortages, or energy prices – continue to strain balance sheets. Industry plans to raise technology investments in 2026 to deliver productivity uplifts that can manage rising costs," said Innes Willox, CEO of the AI Group, in a statement.
"Government is also a major source of cost pressures on industry – 37% of leaders cite tax burden, and 33% compliance burden, as a leading negative impact on their business."
Employers are calling for regulatory reform to address the challenges faced by their businesses.
"The message from industry leaders is clear: regulatory reform is essential if we are to deliver the higher investment levels needed to drive a return to productivity and robust growth," Willox added.
"The Treasurer's Economic Reform Roundtable last August canvassed a wide range of potential reforms, across issues as diverse as planning, licensing, skills, federalism, tax and more. Now is the time to get on with the job and deliver these reforms."
