Australia Water Market Update

Well, Melbourne desal has been awarded to the Thiess-Degremont-Mac Bank consortium. Compared to Veolia-John Holland-ABN, the winning team is coming off a relatively low base of work. Veolia and John Holland are now in an unenviable sitution of coming off a massive 08/09 and facing a very quiet 09/10.

This was the outcome that would cause maximum impact on the labour market; let the adjustment begin.

Australia Water Jobs Market Update

Things are a bit grim in the water jobs market in Australia currently. The GFC effect has combined with a significant but unconnected drop-off in the volume of infrastructure projects. With $9b Western Corridor project and Gold Coast Desal  wrapping up in Queensland, and design work on Sydney Desal largely complete, the engineering consultancies and construction firms suddenly have a lot of free staff on their books.

With skill shortages fresh in their memories, firms have been reluctant to lay off good people, but are certainly not hiring. This has been compounded by the GFC related slow-down in mining, and overseas markets. Consultancies are moving people across from mining into water projects, and from slow markets overseas into Australia. Consequently large projects like Perth2 Desal and Adelaide desal have not resulted in significant new job creation.

This has been compounded by the situation in regional NSW, where stalled governance reforms have basically stopped all infrastructure work while local governments wait to see what the outcome will be.

Looking on the bright side, there is still some significant treatment plant work on the horizon in Queensland, with governance reforms being finalised. Tasmania, suffering from a changed rainfall regime and run-down infrastructure, has just completed their water and wastewater governance reforms, which will release plenty of work there. Melbourne’s dams sitting at 27% as I write, and with another El Niño on the way, I can see a major  infrastructure round coming up.

On the subject of Melbourne, everyone is waiting with bated breath to see which shortlisted alliance will win the $3b desal project. Depending who wins, this may actually produce fewer new jobs than expected. The Veolia/John Holland Alliance has recently completed the Gold Coast and Sydney Desal plants, and should be reasonably well resourced if they win Melbourne, but substantially over resourced if they don’t. Degremont/Theiss will have some ramping up to do.

My forecast is that things will get worse in the water job market before they get better.

So where are the jobs? There is always a steady trickle of opportunities outside the major cities, particularly with regional water authorities, and for civil water & wastewater engineering consultants willing to work outside the major cities. Most consultancies are still willing to bring on board people who they know will win them business, i.e. locals with an established network and reputation for good work…there is still a shortage of  experienced wastewater and water treatment process engineers for example. Some firms that missed the boat on the 2007/2008 boom are not over-resourced, and are more open to hiring than others.

The longer term prospects are good for water work here. Australia will continue to be a case-study for climate change, and much of the talent in the industry is still due to retire in the next 5-10 years. Watch this space.