PROMISING OUTLOOK IN 2017 FOR CONSTRUCTION

As Australia’s construction industry undergoes a rebalancing act, the sector is forecast to experience sharp growth in road, rail and telecommunications projects throughout the 2017 calendar year.

The rise in these projects is expected to offset the declines in mining-related infrastructure works.

Peak construction groups Australian Constructors Association and the Australian Industry Group collaborated on the latest Construction Outlook report that was published in June 2016.

The report showcases the responses from 100 construction companies that were surveyed between March and April. The companies have a combined annual turnover of almost A$30 billion and employ approximately 45,000 people.

According to Construction Outlook, overall non-mining infrastructure activity is anticipated to rise 4.5 per cent in 2017.

Propelling this growth is the engineering construction sector which, as a whole, is forecast to grow 5.5 per cent.

Sub sectors of engineering construction include road projects which are expected to rise 11.7 per cent. Rail works are predicted to surge almost 15 per cent in 2017, while telecommunications infrastructure activity is forecast to increase 12.2 per cent – driven by National Broadband Network investment.

Other civil infrastructure projects including construction works on some ports and terminals are anticipated to rise about 5 per cent during 2017.

Although mining-related infrastructure construction is expected to fall further in 2017, this descent is expected to slow.

In its 2016-2017 budget, the Australian Government committed more than $50 billion towards current and future infrastructure investments including road and rail projects throughout the country. Many in the industry believe this investment will assist construction and infrastructure growth and boost employment.

MAJOR GROWTH AREAS FOR CONSTRUCTION INFRASTRUCTRE IN 2016

Although the 2016 construction outlook is not as bright, some sub sectors are expected to rise with road works to increase 10.6 per cent, rail activity 10.7 per cent and telecommunications infrastructure projects anticipated to rise almost 9 per cent.

Another burgeoning construction sub-sector this year is multi-level apartment development, which is predicted to grow almost 11 per cent.

Meanwhile, commercial construction activity, which includes offices and retail buildings, is to experience a slight 1 per cent uptick in 2016 but larger growth of 4 per cent in 2017.

 

promising outlook in 2017 for construction

Australian Industry Group chief executive officer Innes Willox said the construction sector’s overall rebalancing act is expected to continue throughout 2016 and 2017 with transport and infrastructure projects to counteract much of the falls in mining-related infrastructure activity.

LABOUR SHORTAGES SURFACING

With a positive direction for Australia’s construction sector developing, the previous skills shortage issues experienced during the resources boom have begun to re-emerge.

As major infrastructure works are commissioned, labour scarcity is, again, materialising with 44 per cent of Construction Outlook respondents reporting difficulties in sourcing skilled workers in the six months to March 2016 – substantially higher than the 29.1 per cent of respondents who said this was the case in the in the 6-month period to September 2015.

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