Big Opportunities in Road Construction Boom: Market Report

Friday, February 20th, 2015
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As the Abbott government gears up to fulfil infrastructure promises, builders and contractors face significant opportunities from a sound pipeline of road construction projects, albeit with activity on the construction of other forms of transport set to drop back a bit.

Having dropped to post GFC lows of $15.686 billion in 2013/14, the dollar value of work done on construction of roads throughout Australia is set to remain at a modest $15.713 billion in 2014/15 but rise to $18.183 billion in 2016/17 before hitting a record $19.452 billion in 2017/18, according to the most recent forecast from Australian Construction Industry Forum.

Activity on other non-road forms of transport, however, are expected to drop back to a still historically respectable $9.560 billion by 2017/18 after a strong year of activity in 2014/15 ($13.820 billion).

Opportunities abound in several states, with a number of projects set to keep activity at high levels in New South Wales. Big comebacks are expected in Queensland, South Australia and Western Australia following periods of relatively soft conditions in these states.

Behind this activity lies robust levels of population growth as well as the well documented federal government push for infrastructure and especially new roads.

Still, much uncertainty remains. Victoria has cancelled the East West Link Project and the government in that state is currently wrangling with the consortium that had been slated to carry out that work over compensation. The Vic government is promising to build a new rail link, widen the Tullamarine Freeway, upgrade rural and regional roads and remove dangerous level crossings.

In Queensland, meanwhile, a plan to privatise electricity assets in order to pay off public debt and beef up infrastructure spending will not go ahead given the change in government in that state and commitments on the part of the new Labor government not to privatise assets. While Labor’s plans regarding infrastructure are yet to be announced, it is likely their program of investment will not be as extensive as that previously planned by the LNP as they will not have the benefit of funds from privatised assets.

Moreover, a deteriorating fiscal position may challenge the federal government’s capacity to fund its infrastructure hopes, while the fiscal position of many states will mean extensive investment in capital assets will be difficult to achieve in absence of substantial private investment.

All this could put some dints in the above forecasts, which were issued prior to the Queensland and Victorian elections.

road construction

bridge construction

State by State (Major States)

New South Wales

Thanks to strong levels of public infrastructure spending, the value of work done on road construction in New South Wales will remain at historically elevated levels of between $5.7 billion and $6 billion per annum over the coming years. Activity on non-road forms of transport will rise from a low of $2.239 billion in 2013/14 to $2.623 billion in 2014/15 and remain at historically respectable levels thereon after.

Significant upcoming projects (as per Cordell – information updated late 2014):

  • WestConnex – Overall Project, $11.5 billion, start: Jul 15, tunnels/subways, linking of Parramatta to Sydney CBD and Sydney Airport, stage: early
  • WestConnex M4 East – Parramatta to Haberfield section, start: Jul 16, stage: registrations of interest
  • Pacific Highway – Woologoolga to Ballina, $5 billion, start: Jul 15, Bridges, Aqueducts, Viaducts, stage: registrations of interest
  • Badgerys’s Creek Airport – Infrastructure Project, $3.5 billion, start: Feb 2016, stage: early


Although the value of work done on non-road forms of transport infrastructure in Victoria is expected to drop back from a peak of $1.519 billion in 2013/14 to just $891 million in 2016/17 as work on the Regional rail Link finishes up, that done on roads is expected to bottom out at decade lows of $1.617 billion in 2014/15 before returning to more respectable levels of $2.253 billion two years later (note: the forecast was made before cancellation of East West Link).

Significant upcoming projects (information per Cordell):

  • Melbourne Rail Link, $8.5 billion, start: June 17, Link from South Yarra station to northern rail lines, status: early
  • Princes Highway Duplication – Winchelsea to Coolac, $515 million, Dec 15, Bridges/aqueducts/viaducts, status: early
  • CityLink/Tullamarine Freeway Northern Works, $400 million, start June 15, status: possible
  • CityLink/Tullamarine Freeway Widening – Southern Works, $400 million, start June 15, status: possible


Queensland is expected to experience a significant rebound in construction work on road and non-road forms of transport construction with the former expected to bottom out at decade lows of $4.297 billion in 2013/14 to reach $6.034 billion in 2015/16 and the latter expected to bottom out at $1.195 billion in 2013/14 to reach $1.405 billion in 2015/16. These forecasts were issued before the state election and considerable levels of uncertainty exist regarding the new government’s infrastructure intentions.

Significant upcoming projects:

  • Toowoomba Second Range Crossing, $1.6 billion plus, Aug 15, Second road crossing of Toowoomba Range (tunnels, subways), status: firm
  • Gateway Upgrade North Project, $1.3 billion, start: Mid 2014 (major works), Upgrade of Gateway Motorway between Nudgee and Bracken Ridge, status: firm
  • Brisbane Airport New Parallel Runway, $1.3 billion, Jan 2017, status: early

Western Australia

Helped along by work on projects such as Gateway WA and the Mitchell Freeway extension project, the value of road building activity in Western Australia is set to bounce back to more than $2.7 billion in by 2016/17 after bottoming out at just over $1.7 billion this year. Activity on ports, railways and bridges is set to drop back from an exceptional $7.326 billion in 2014/15 to less than $4 billion by 2017/18 as work on infrastructure associated with resource projects dries up.

Significant upcoming projects:

  • Anketell Point Port, $3.1 billion, start date: Late 2014 multi-user deep water point in Pilbara, status: possible
  • Mines to Oakajee Port Infrastructure Project, $1.6 billion, start: early 2015, rail & port infrastructure for various mines, status: possible
  • Mitchell Freeway Extension Project, $315 million, start: Apr 16, status: registrations of interest

South Australia

Thanks to work on a range of projects associated with the South Road upgrade, the value of road building activity is set to bottom out at $751 million in 2014/15 before more than doubling to $$1.633 billion by 2017/18. Activity on non-road forms of transport is expected to increase from $377 million to $498 million.

Significant upcoming projects:

  • South Road North South Corridor Upgrade – Torrens Road to River Torrens & Ashwin Terrace, $620 million, late 2015, status: registrations of interest
  • South Road Darlington Upgrade Project, $500 million start: late 2015, status: early
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