Con­struc­tion set to surge to decade high

Ac­tiv­ity in the com­mer­cial con­struc­tion sec­tor is set to have the best year in more than a decade.

Business First - - CONSTRUCTION -

With fore­cast growth of more than 14.5 per cent (equal to $5.3 bil­lion) com­mer­cial build­ing ac­tiv­ity will be strong enough on its own to drag the whole in­dus­try back into pos­i­tive ter­ri­tory for the first time in four years,” Matthew Pol­lock, Mas­ter Builders Aus­tralia’s Na­tional Man­ager Economics said.

The lat­est Build­ing & Con­struc­tion In­dus­try Fore­casts pro­duced by Mas­ter Builders Aus­tralia show that to­tal com­mer­cial con­struc­tion ac­tiv­ity is ex­pected to con­trib­ute $42 bil­lion to the econ­omy in 2017-18.

“With a small mod­er­a­tion ex­pected in the value of res­i­den­tial con­struc­tion work and an­other year of con­sol­i­da­tion in the en­gi­neer­ing sec­tor, the tim­ing of this surge in com­mer­cial con­struc­tion couldn’t be bet­ter,” Matthew Pol­lock said.

“Bet­ter yet, new com­mer­cial con­struc­tion projects will pro­vide job op­por­tu­ni­ties for work­ers who may be fin­ish­ing up on ma­jor high den­sity res­i­den­tial projects over the next 12 months or so,” he said.

“New re­tail re­lated con­struc­tion is ex­pected to rise to $6.9 bil­lion in 2017-18, led by the re­cent in­tro­duc­tion of some big in­ter­na­tional re­tail­ers, in­clud­ing Ama­zon which re­cently built a large dis­tri­bu­tion cen­tre in Melbourne’s Dan­de­nong South and plans by Aldi to open an­other 30 stores across the coun­try in the next 12 months,” Matthew Pol­lock said.

“Asia con­tin­ues to be a strong source of tourist vis­i­tor num­bers, par­tic­u­larly from Ja­pan, South Korea, Malaysia and China. Asian in­vest­ment is fol­low­ing the tourists with $4 bil­lion com­mit­ted to the con­struc­tion of new pipe­line of re­sorts and ho­tels with Queens­land’s re­sort sec­tors fore­cast to do par­tic­u­larly well,” he said.

“Look­ing a lit­tle fur­ther down the track, the Gov­ern­ment’s in­vest­ment in ma­jor trans­port in­fra­struc­ture is ramp­ing up and will sup­port a boom in trans­port re­lated con­struc­tion over the next 5 years. There are cur­rently more than $170 bil­lion in trans­ports projects in the pipe­line, with ac­tiv­ity ex­pected to peak in 201920. This work will pro­vide jobs for years and also pro­vide much need pro­duc­tiv­ity en­hanc­ing in­fra­struc­ture. Mas­ter Builders has called for a greater fo­cus on in­fra­struc­ture in­vest­ment to sup­port busi­nesses, but also to boost new hous­ing sup­ply and help with hous­ing af­ford­abil­ity,” Matthew Pol­lock said.

“On the res­i­den­tial build­ing front, the last three years saw un­prece­dented growth in new hous­ing con­struc­tion. We have built more than 200,000 new dwellings per year – a feat un­matched in our his­tory,” he said.

“De­spite the fore­cast show­ing a mod­er­a­tion in new dwelling con­struc­tion, we ex­pect new com­mence­ments in 2017-18 to top 195,000 and av­er­age around 185,000 there­after. To keep pace with pop­u­la­tion growth we will need to build at least 185,000 new dwellings each year for the next five years,” Matthew Pol­lock said.

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