Three States Leading Construction Activity

Thursday, September 17th, 2015
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Australia Construction Industry
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Amid a decent pipeline of projects, Tasmania has shot forward to be the nation’s leading state in terms of the economic performance of its civil and commercial building sector, according to a new report.

In its latest Construction Monitor report ranking the current economic performance of varying states and sectors according to a range of measures of building activity against long-run averages, Australian Construction Insights said Tasmania came out on top, followed by Victoria, the Northern Territory and New South Wales.

Tasmania ranked as the best performing state in terms of activity relative to long-term trends in the areas of telecommunications as well as roads and highways, and also scored highly in terms of commercial buildings, bridges, railways and harbours, mining and heavy industry and water supply, storage and drainage.

Second-ranked Victoria performed best in terms of industrial buildings and ‘other non-residential’ buildings as well as civil recreational facilities, while the Northern Territory registered top performance in work on commercial buildings, electricity generation and transmission, heavy industry and telecommunications.

At the other end of the scale, Western Australia came in last followed by Tasmania, South Australia and Queensland.

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Despite a lack of apparent drivers to underpin sustained momentum amid a stagnant economy and virtually zero population growth, the construction sector in Tasmania has seen healthy gains in activity of late amid a decent pipeline of new projects.

As well as the new Royal Hobart Hospital, these include the redevelopment of Myer and new developments at Parliament Square, the new MACO1 Hotel, a student housing project and performing arts centre at the University of Tasmania and the Macquarie Street Hotel as well as an extension to the Hobart Airport and the Midland Highway.

Going forward, ACI sees a ‘neutral’ outlook for activity in non-residential building overall amid an accelerating pipeline of work in buildings associated with retirement living and religious activities but a weakening outlook in areas associated with retail and wholesale trade, transport buildings, offices, education and healthcare.

Conditions in the civil sector are seen as ‘weakening’ amid what are expected to be slower levels of activity in the construction of infrastructure associated with heavy industry – bridges, railways and harbours, electricity and water.

Still, ACI economist Geordan Murray says the report points to areas of promise.

“There is a strong pipeline of work evident for the aged care sector and also for religion buildings, while the short term outlook is reasonably healthy for the sectors of agricultural and aquaculture buildings, health, entertainment and recreation, and short term accommodation,” Murray said.

Murray said in terms of states, the rankings had adopted the “social order of an old world manor house” with a demarcation between upstairs and downstairs.

“New South Wales, Victoria, Tasmania and the Northern Territory are enjoying the prosperity upstairs, while Queensland, Western Australia, South Australia and the Australian Capital Territory are living rough downstairs,” he said.


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