Construction industry members need to understand that the real bottom line revolves around people. The wayward lines on charts published in industry forecasts, including those by us at Australian Construction Industry Forum (ACIF), are not just about money, but the hopes and lifestyles of the roughly one million Australians who contribute to the building of the houses, offices, schools, hospitals, roads and other buildings and infrastructure which makes up our nation’s built environment.
For this reason, it is heartening to see the outlook revealed in our November forecasts improving for some states and sectors, while early warnings of flat or declining areas and work types at least give businesses and people time to reflect and plan their next steps.
So what do the forecasts indicate? Overall, as declines in activity within some sectors of the industry are offset by increases in others, the dollar value of construction work done in 2013-14 is expected to amount to around $229 billion – roughly similar to activity levels achieved in 2012/13 but around 75 per cent higher compared with output levels achieved a decade ago, even after taking out the impact of inflation.
However, the forecasts also reflect a series of turning points within different sectors of the industry and different states. These reflect key macro-economic changes and industry developments.
Falling commodity prices, for example, have narrowed the pipeline of new major development projects or deferred other major projects — the engineering construction boom is projected to taper off.
Meanwhile, historic lows in interest rates and improved housing affordability are expected to encourage an uplift in housing starts and an increase in residential construction spending.
Finally, a recent recovery in investor sentiment as well as lower interest rates is expected to encourage an improvement in commerce that will be reflected in an upturn in non-residential building spending.
However, the most accurate view is in the detail. More than ever, the big picture view of the forecasts hides considerable variation, swings and troughs in construction spending in specific sub-sectors and in different states and cities. Decision makers whose plans impact our industry’s one million people need the most relevant and accurate information available.