WORK SHORTAGES AND RISING COSTS MAKE LOCAL CONTENT REQUIREMENTS A NON-NEGOTIABLE FOR GOVERNMENT PROCUREMENT
Weld Australia has released the results of its 2024 Member Survey. The findings demonstrate that Australia’s welding and fabrication industry is facing chronic work shortages, along with cost challenges amid rising prices of energy, materials and labour.
The Federal and state governments must commit to building sovereign manufacturing capability by legislating local content policy. This will create a capacity mechanism that generates a clear, long-term signal for in the necessary technology, workforce, and equipment. With long-term demand a reality, local manufacturers will have the confidence to improve production efficiencies and global competitiveness.
According to Geoff Crittenden (CEO of Weld Australia), “Australian welding businesses are facing unprecedented pressures. Lack of work, combined with the rising costs of energy, materials and labour, is making it nearly impossible for companies to invest in the technology and skills necessary to stay globally competitive. We need a clear and enforceable commitment from the Federal and state governments to support local manufacturing.”
Weld Australia’s 2024 Member Survey found that half of welding workshops are operating at 80% capacity or below, with 7 in 10 members indicating they have the capacity for additional work. The overwhelming concern across the industry is the lack of a steady pipeline of projects, with 75% of respondents citing a lack of work as their primary challenge.
“The solution lies in enforceable local content requirements,” continued Crittenden. “Government-backed initiatives must prioritise Australian-made steel and fabrication in renewable energy projects and other infrastructure developments. This would provide the long-term security our industry needs to invest in advanced technologies, productivity improvements, and workforce development, ensuring Australia remains competitive on a global scale.”
“The Federal and state governments must commit to building sovereign manufacturing. Local content legislation must specify that 60% of all fabricated steel used in our renewable energy projects is manufactured in Australia by local welders. This local content legislation must be drafted in conjunction with industry to eliminate the loopholes that so often arise in these types of policies. Australian governments must also mandate that all wind towers are constructed, erected and inspected according to Australian Standards.”
The Survey also revealed that inflation is key concern for the welding industry. When it comes to the factors most likely to inhibit business growth over the next 12 months, 64% of business owners cited the rising cost of energy, 61% cited the rising cost of materials, and 50% cited rising labour costs.
Weld Australia members rated themselves as highly-productive: two-thirds of business indicated that the productivity of their welding staff as good or excellent. However, out of the total labour hours per shift, 25% of survey respondents spend less than two hours of their shift doing actual welding (with the arc switched on); 58% spend less than four hours. This is compared with five hours per welder per day in countries like the United States and Germany (that have similar Workplace Health and Safety Standards). The factors most likely to impact on the productivity of welding staff are time spent on tasks like materials handling (42%) and joint preparation and fit up (21%).
“A clear pathway to productivity is through the use of technology. When companies are focused on improving their processes, they naturally innovate—implementing the latest technologies in a bid to streamline operations. However, uptake of advanced welding technology remains relatively slow. This lack of tech adoption is impeding our ability to navigate the current challenges facing the industry,” said Crittenden.
“Business owners are caught in a difficult position, juggling rising costs and a lack of work with the imperative to innovate and remain competitive. The reality is that without a guaranteed supply of work, particularly from government-backed projects, many welding businesses will find it difficult—if not impossible—to justify the necessary investments in advanced technologies. We risk losing critical skills and capabilities that are essential for our nation’s economic future,” Crittenden warned.
“Local content requirements will fortify our domestic supply chains, boost investor confidence, and cultivate a skilled workforce, positioning Australia as a global manufacturing leader. This will create a capacity mechanism that generates a clear, long-term signal for investment by private equity and local manufacturers.