Migrants fuel population boom as Australia tries to solve skills crisis

Australia has welcomed almost 200,000 migrants in the last 12 months as companies around the nation try desperately to fill skills gaps.

Australia has welcomed almost 200,000 migrants in the last 12 months as companies around the nation try desperately to fill skills gaps.

But the growth is coming at a cost, with infrastructure and government services groaning under the weight of the population influx.

Australia’s population grew by 1.61% in the 12 months to March, the fastest rate of growth in almost 19 years.

Victoria’s population is growing at the fastest rate in 37 years, South Australia’s population is growing at the fastest rate in 24 years, and Western Australia’s population is growing at the fastest pace in 19 years. Just under 278,200 babies were born over the year to March, putting the birth rate at just less than a 26-year high.

Commsec economist Savanth Sebastian says the influx of migrants has been crucial in keeping Australia’s economy on track.

“The record increase in migration levels has been pivotal in keeping down wage and price inflation in Australia,” Sebastian says. “Demand for labour has been soaring but importantly the supply of workers has been just as strong, not just through immigration but more mothers and seniors in the workforce.”

But Sebastian points out the boom does put greater demands on the economy, and some sectors, such as infrastructure and housing, are struggling to keep up.

Chris Lamont, chief executive of policy at the Housing Industry Association, agrees. “The lack of affordable dwellings in Australia continues to reduce housing affordability. A massive boost in the supply of affordable housing for both the public and private sector is now desperately needed.”

Still, strong immigration should mean improved conditions for the housing construction sector 2009. “Building material companies, developers, retailers and banks have potential to gain from the lift in housing activity,” Sebastian says.

Rising birth and migrant numbers should also help boost retail spending, helping retailers such as Woolworths, Harvey Norman and David Jones.

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