Conditions within the civil and engineering construction sector across Australia remain extremely buoyant as activity has reached its highest level in seven years, a new report shows.

The Australian Bureau of Statistics has released the September quarter edition of its Engineering Construction Activity Report.

(above image: Victoria Big Build)

On a seasonally adjusted basis, the report indicates that the dollar value of work done on civil and engineering construction throughout Australia increased by 3.3 percent during the September quarter to come in at $34.952 billion (2022/23 dollars).

At this level, the quarterly value of work is at its highest level since the mining boom with the exception of a spike which occurred during the September quarter of 2017 that was associated with LNG projects.

The figure also represents a 6.8 percent year-on-year increase compared with the September quarter of 2023.

Meanwhile, the value of work commenced reached $32.936 billion in the September quarter – the third highest level since the mining boom.

Engineering Construction Activity – Australia

Not surprisingly, much of the growth in work done is being driven by projects which are being delivered for the public sector. This includes a massive volume of public road and rail developments.

All up, the dollar value of work done on public sector projects increased by 5.5 percent during the September quarter and by 13.8 percent over the year to September.

Over the four years to September, the value of work done for the public sector has almost doubled from $9.948 billion in the September quarter of 2020 to $18.226 billion in the September quarter just passed.

Conditions in developments which are being completed for the private sector are more subdued, having edged up by only 1.4 percent over the past year and risen by a modest but respectable 18.1 percent over the past four years.

Quarterly Engineering Construction Activity by Public and Private Sector – Australia

In terms of subsectors, the report shows that:

  • Transport remains exceptionally busy as the nation continues to work through a record pipeline of public projects. Railway construction activity is running at record levels whilst road building activity has peaked but remains elevated.
  • The boom in energy is gathering momentum as work continues to ramp up on major developments associated with the nation’s energy transition.
  • Water and sewerage related work continues to increase on account of projects which are designed to improve water security especially in Queensland.
  • Stronger workloads are coming through in mining and heavy industry.

Going forward, the outlook for the sector remains promising.

In a forecast issued last November, Australian Construction Industry Forum said that it expected the value of work done on civil and engineering construction projects to remain at elevated levels over the next three to four years as easing conditions in transport construction are offset by higher levels of work in energy and water.

Whilst the strength in activity levels is broadly welcome, the volume of work which is currently underway is creating challenges in terms of resource constraints and project delivery.

In its latest report, Infrastructure Australia says that the nation faces a current shortage of almost 200,000 workers across key infrastructure categories to meet public sector requirements.

Building industry lobby groups welcomed the latest data.

In a statement, Master Builders Australia Chief Executive Officer Denita Wawn and Chief Economist Shane Garrett said that the current pipeline of work is delivering important benefits.

In the immediate term, the strong work pipeline is helping to support otherwise subdued economic conditions.

Longer term, Garrett and Wawn say that the current round of projects will help to support greater capacity from which to grow the economy and to deliver critical housing and services.

“When the building and construction industry is strong, so too is the economy,” Wawn said.

“For every $1 million invested into the industry, $3 million is returned to the economy.

“Investment in engineering construction like roads, rail and other critical infrastructure, plays a crucial role in addressing the housing crisis.”

 

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