Eastern states in Australia and in particular New South Wales and Queensland are expected to experience a ‘mini-boom’ in construction, new forecasts suggest.
Set to be released during a series of industry breakfasts around the country from July 20 to 23, forecasts from the Australian Construction Industry Forum suggest activity is powering ahead amid strong levels of investment in housing, commercial building and infrastructure.
ACIF CEO Peter Barda said notwithstanding the resource sector pull-back, stronger conditions in eastern seaboard markets would benefit the state’s workforce.
“Employment is the big, good news story coming out of the latest ACIF Forecasts – despite a decline in mining infrastructure,” he said. “New South Wales and Queensland are powering ahead. There is a resurgence in non-residential building, with new drivers of structural change re-shaping the CBD office markets. Infrastructure investment is driving new investment in industrial buildings.
“For these states, there is every chance of a mini boom in engineering construction – led by roads and followed by mining.”
Still, not all is rosy even in the growing eastern seaboard markets. While residential dwelling completions are going ‘through the roof,’ Barda questioned how long this can be sustained, along with what Victoria was going to do about a civil construction sector which he said ‘pales in comparison to its competitor states.’
The residential boom has seen the dollar value of work done on new home construction surge by an estimated 11 per cent in 2014/15, but the overall dollar value of construction work done is expected to have fallen by 3.4 per cent to go from $231 billion in 2013/14 to $224 billion in 2014/15 amid a 13.9 per cent drop in engineering construction from $122 billion to a still historically elevated $106 billion and non-residential building eased back 1.3 percent to come in at $35 billion.
Around Australia, the focus of opportunities within the building sector is shifting as work on resource sector projects pulls back but that on apartment building and transport infrastructure is picking up.
On a seasonally adjusted basis, more apartments were approved for construction in the first five months of this year alone than over the whole calendar year during the recent downturn in 2011.
In transport, meanwhile, NSW is pressing ahead with a massive road and rail building program funded largely by the privatisation of electricity assets.
Queensland, which is not privatising assets, will see a more modest $2.9 billion transport and road program in 2015/16, the government said after announcing the State Budget on July 15.