(Bloomberg) -- A labor crunch across critical industries threatens to weigh on Australia's economic recovery, business leaders warned on Wednesday as they added to calls for a boost in skilled migration.
The nation faces a shortfall of about 300,000 workers, Jennifer Westacott, the chief executive of the Business Council of Australia, said at a forum in Sydney. “The real shortage of labor is actually holding us back, threatening to stall recovery,” she told the Australian Financial Review Business Summit.
The warning was echoed by fellow panelists Rob Scott, CEO of retail giant Wesfarmers Ltd., and Stephen Halmarick, chief economist of Commonwealth Bank of Australia, who pointed to a tightening in the labor market and wage pressures.
Australia's economy rebounded strongly last quarter as states emerged from virus-driven lockdowns. Job vacancies are soaring, with unemployment sitting at a 13-year low. The nation finally reopened its international borders last month, and economists warn it will be some time before migration returns to pre-pandemic levels.
“The question is achieving the momentum for recovery,” Westacott said. “We cannot get some of these big projects going because we haven't got the labor to do it,” she said, adding that access to labor may hinder flood recovery efforts on the east coast.
Scott, whose firm is one of Australia's biggest private employers, said he was seeing cost pressures.
Australia's Economy Rebounds, Confronts Darkening Global Outlook
“We're seeing some very strong wage pressure in certain areas, and they're areas that are just so critical to future growth and productivity, and this is anything in the areas of technology, data-digital, increasingly supply chain” as well as major project development, construction and engineering roles, he said.
CBA's Halmarick cited the “combination of getting new skills coming in with new people and training people already here” as among the biggest challenges facing Australia.
For now, Australia's economic outlook still looks solid with the Reserve Bank seen raising interest rates this year from a current record low of 0.1% as unemployment falls and inflation accelerates.
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