The boom in major project construction in Queensland will be larger than what was previously anticipated, the latest report suggests.

Releasing its Queensland Major Projects Pipeline 2021 report, Queensland Major Contractors Association (QMCA) says the value of committed and possible major projects over the next five years has risen by $11.3 billion from $50.7 billion when the same report was prepared last year to $61.9 billion in the current report which covers the five years between 2020/21 and 2025/26.

Of the $11.3 billion increase in pipeline value, $8 billion relates to projects for which funding commitments have already been made.

All up, funded projects account for $35.5 billion of the overall pipeline.

As a result of all this, if only funded projects are considered, QMCA expects the annual value of construction work done on major infrastructure projects to expand from just over $6 billion in 2019/20 to a peak of just over $10 billion in 2022/23.

If projects which are possible but not yet funded are added in, the potential value of work reaches $16 billion in 222/23 and a peak of more than $17 billion in 2023/24.

As noted below, growth in the pipeline is being driven by additions in road, energy and resource work (see below).

Meanwhile, previous funding commitments mean that rail projects will continue to be a driver of activity.

Source: BIS Oxford Economics and QMCA member knowledge

Longer term, QMCA says there are opportunities for further pipeline enhancement.

In South-east Queensland, the 2032 Olympics presents an opportunity to create a legacy of assets which will deliver benefits for 50 years or more.

Meanwhile, the transition to NetZero energy will create opportunities for projects in renewable energy generation, storage and hydrogen along with a need for upgrades to roads, rail lines, ports, pipelines and other infrastructure.

Despite the positive outlook, the report identifies challenges to project delivery.

Internationally, pressures on construction material supply and costs are likely to persist for at least another eighteen months, it says.

Depending on the extent to which unfunded projects move ahead, meanwhile, labour requirements on major projects are expected to increase from 14,500 full-time equivalent roles in 2020-21 to between 21,100 and 30,700 FTEs by 2022/23.

This is happening at a time when Queensland is competing for skills with other states.

As well, QMCA says action is needed to improve productivity and bring projects to market more quickly.

On the former issue, the sector needs to innovate and leverage new technologies such as AI machine learning.

On the latter, timeframes need to be reduced for project scoping, business case completion and the granting of approvals and funding.

Nevertheless, QMCA CEO Andrew Chapman says the outlook is positive.

“Queensland is an exciting place to be with infrastructure investment set to soar over the next five years …,” Chapman said.

“… 136 major projects are funded, which is fantastic news for the industry and for Queenslanders who will directly benefit from significant investment in construction and engineering, through supply chain and employment opportunities as well as the through access to economically beneficial assets delivered in the coming years.”

The report was prepared by QMCA with help from Oxford Economics.

Source: BIS Oxford Economics and QMCA member knowledge


Key Sectors of Growth

According to the report:

  • With an additional $4.5 billion worth of new funded work having been added, the road and bridge sector is leading the way in the expansion of the pipeline just released as opposed to that released last year. All up, QMCA says the dollar value of major project work on roads and bridges will increase from $1.4 billion in 2020/21 to $2.5 billion in 2021/22 and peak at just over $3 billion in 2022/23. Significant developments driving this activity include the Brisbane Metro CP, the Cooroy to Curra Section D of the Bruce Highway upgrade, the Rockhampton Ring Road, Stage 1 of the Coomera Connector and the Varsity Lakes to Tugun section of the M1 Pacific Motorway.
  • Next is non-water utilities, where value of funded projects included in the pipeline has expanded by $2.3 billion amid funding commitments to the Copperstrong Transmission Line in the state’s north, the McIntyre Wind Farm and the Queensland component of the National Broadband Network. Other potential but non-funded projects which have been added include the Forest Wind project and the Queensland component of the Northern Gas Pipeline extension. Thanks partly to these additions, the dollar value of work done is expected to rise from just over $1 billion in 202/21 to $2.6 billion in 2021/22 (mostly committed) and a potential peak of $3.0 billion in 2022/23 if all possible projects go ahead.
  • In heavy industry, the value of the funded project pipeline has risen by $1.4 billion and activity is now expected to increase from $1.8 billion in 2020/21 to an amount ranging from between $2 billion to almost $5 billion in 2022/23 and between $1.0 billion and $6.1 billion in 2023/24 depending on the extent to which projects which are not yet funded go ahead.
  • Whilst aforementioned sectors account for most of the new pipeline additions, the contribution of railways and harbours must be acknowledged on account of the volume of work in this sector. All up, activity in this sector is expected to increase from $1.6 billion in 2020/21 to a peak of $3.7 billion (mostly funded) in 2023/24. Major projects include Cross River Rail, Inland Rail, North Galilee Basis Rail and stage 3 of Gold Coast Light Rail.