Mining States Can Expect Slump in Engineering Work 1

Tuesday, April 15th, 2014
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A new report from a leading economic consultancy foresees a prolonged slump in engineering construction work as a result of the end of mining sector’s investment boom.

The latest Engineering Construction in Australia report issued by economic consultancy BIS Shrapnel forecasts an activity decline of 25 per cent in the next five years.

Those states with economies that are heavily dependent upon the mining sector are set to log the largest declines as a result of the shelving, cancellation or completion of resource projects.

Engineering and construction work is expected to halve in Queensland over the next several years and to plunge by a quarter in mineral-rich Western Australia.

According to Adrian Hart, senior manager of BIS Shrapnel, work will be scarce in the near term in the engineering sectors of states with resource-driven economies.

“It’s been driven purely by oil and gas work, as this comes off in line with other resources work, we’re going to see a very steep fall in engineering construction over the next five years,” said Hart.

In addition to the mining heavyweights of Western Australia and Queensland, the Northern Territory’s engineering and construction sector is also set to suffer as result of the resource sector’s investment cycle, with the completion of work on the massive Ichthys liquefied natural gas development expected to trigger a slump.

Hart points out, however, that New South Wales is likely to be the exception to the dire prognosis for Australia’s engineering and construction sectors, with activity spurred by major infrastructure projects – particularly those relating to new roads and public transportation.

“The big upside is New South Wales,” said Hart. “We’ve got a very strong pipeline of public infrastructure works in New South Wales and we expect to see activity rise significantly from a low in 2013 – 14…it will be the state that bucks the trend from here.”

The National Broadband Network may also provide a glimmer of light for engineering and construction activity over the next five years, providing new work to mitigate the slump induced by the end of the mining investment boom.

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  1. Tom Gilson

    Guess this has been long known, although notwithstanding media hype, engineering construction activity is going to remain at high levels.

    Fortunately, residential and commercial projects are starting to come online, so that should largely make up for it.