The boom in civil and engineering construction throughout Australia has peaked for now but remains strong, new data shows.

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

The report provides a quarterly snapshot of activity across the heavy and civil engineering construction sector in Australia.

It indicates that the volume of work has peaked for now but remains at the highest level since the LNG boom in 2016 (see chart).

On a seasonally adjusted basis, the value of work done on heavy and civil engineering construction throughout Australia dropped back by 6.6 percent to come in at $35.851 billion (2023/24 constant dollar terms) during the September quarter.

This was expected as it followed a June quarter surge that reflected a one-off spike in mining construction work.

Year on year, September quarter activity was 2.8 percent lower compared with the September quarter of 2024.

Meanwhile, the pace at which new work is coming in has levelled off.

Over the twelve months to September, the value of work commenced came in at $118.9 billion. This is almost unchanged from the $118.1 billion worth of commencements that was recorded in the year to September 2024.

Heavy & Civil Engineering Construction Activity, Australia, quarterly

The latest data comes as Australia’s engineering construction sector is undergoing a transition.

On one hand, the boom in transport construction has passed its peak as several road and rail megaprojects are either complete or moving toward completion.

However, work continues to ramp up on energy and water developments (see chart).

In terms of energy, work is being driven by a massive pipeline of renewable generation, storage and transmission projects which are associated with Australia’s energy transition.

This is the case notwithstanding that some projects are being impacted by feasibility challenges, land access and environmental approvals.

In water, elevated activity levels are being supported by government efforts to address water security challenges such as population growth, higher rainfall variability and the water requirements of data centres.

Nicholas Fearnley, Director of Global Construction at Oxford Economics, said that the outlook for civil construction activity remains encouraging.

“The outlook remains strong as activity is transitioning from transportation activity to utilities and mining,” Fearnley said.

“Over the past few years activity growth has been driven by the publicly funded transportation infrastructure boom, with major road and railway projects across all major cities. As work on these projects winds down, growth is shifting towards utilities, with significant investment in both electricity and water infrastructure.

“We are continuing to see strong investment in the National Energy Market to expand the electricity transmission network, and work is progressing on a significant pipeline of large-scale renewable generation and storage projects.

“Water activity is growing strongly, supported by a major capital expenditure program by Sydney Water and work on a number of desalination projects.”

 

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