Australia’s construction industry to regain momentum
Published by Lucy Stewardson,
The Australian construction industry, which contracted an estimated 2.8% in real terms in 2018, is expected to regain growth momentum and rise at a compound annual growth rate of 2.73% during the forecast period (2019 – 2023), supported by the government’s focus on the development of transport and commercial infrastructure in the country. This is according to GlobalData, a leading data and analytics company.
GlobalData’s report (Construction in Australia – Key Trends and Opportunities by State and Territory to 2023) reveals that the industry’s output value in real terms is expected to increase from US$166.7 billion in 2018, to US$190.7 billion in 2023, measured at constant 2017 US dollar exchange rates.
Australia’s construction industry declined from US$171.5 billion in 2017 to US$166.7 billion in 2018, due to a sharp drop in activity in the oil and gas sector, as major oil and gas projects, which provided a spurt to the industry’s growth in 2017, were completed or are close to being completed. These included the multi-billion Gorgon project and the Wheatstone and the Ichthys LNG projects.
Residential construction was the largest market in the Australian construction industry during the review period, accounting for 35.4% of its total value in 2018. However, the market is currently in decline, owing to an oversupply in major cities. According to the Australian Bureau of Statistics, the total number of dwelling units approved in the country decreased by 5.6% in 2018.
“Australia’s construction industry is expected to recover and expand over the forecast period, driven by investments in transport infrastructure,” said Dhananjay Sharma, Construction Analyst at GlobalData. “Uncertainties with regard to monetary and wages policies, as well as political instabilities due to the upcoming federal election in May 2019, are expected to hold back the growth of the residential construction market in the near term. However, with the government planning to invest AUS$75 billion (US$58.9 billion) to develop the country’s transport infrastructure by 2027 – 2028, the sector is expected to regain growth momentum. Commercial and industrial projects, and an improvement in consumer and investor confidence, will also provide support to the sector.”
Read the article online at: https://www.worldcement.com/asia-pacific-rim/11042019/australias-construction-industry-to-regain-momentum/
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