This article is from the Australian Property Journal archive
A FURTHER downturn in construction activity is forecast for 2015 and 2016, reflecting ongoing weakness in the engineering and commercial building sector.
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The latest Ai Group/Australian Constructors Association Construction Outlook survey reveals that following a fall of 3.6% in 2014, the value of turnover is expected to decline at a steeper rate of 4.3% in 2015 followed by a further fall of 1.7% in 2016.
This is largely on the back of further falls in mining-related construction and patchy conditions across key infrastructure project categories. Commercial construction is expected to remain subdued reflecting on-going weakness in the sector`s project pipeline.
Engineering construction is forecast to decline by 7.6% in 2015 and a further 3.6% in 2016.
Following flat conditions in 2014, the total value of commercial construction work is expected to increase by just 1.3% 2015 and 1.5% in 2016.
ACA executive director Lindsay Le Compte said commercial construction is expected to remain constrained by the continuation of subdued overall approvals in this sector.
“However, if governments are able to resolve current constraints on the funding and financing of infrastructure projects it could be expected that from 2016 we would see the commencement of a significant lift in engineering, commercial and residential activity, especially surrounding transport corridors in metropolitan areas,” Le Compte said.
Ai Group chief executive Innes Willox said despite the obvious mining-related challenges the survey does identify a number of bright spots.
For multi-level apartment, solid growth of 14.5% is expected in 2015 followed by a 4.1% rise in 2016, reflecting the approvals in recent months across Sydney and Melbourne.
Australian Property Journal
