This article is from the Australian Property Journal archive
GROWTH in engineering and commercial construction activity will moderate over the next two years, according to the Australian Industry Group.
According to the AI Group’s Australian Constructors Association Construction Outlook survey for May 2007, the total value of engineering and commercial construction work is forecast to rise by 8.7% in 2007 and 6.8% in 2008, following growth of 12.4% in 2006.
ACA’s president Wal King AO said the survey confirms that heavy investment in the resources sector, and the equally strong spending on non-residential building and economic infrastructure, is underwriting continued growth in the construction industry.
“While the industry appears to be close to reaching peak levels, a considerable backlog of work and further solid investment plans will ensure that total activity will remain solid through to at least 2008.
“With resources continuing to be stretched, however, this poses significant risks of project delays and underlines the need for greater cooperation in infrastructure planning by Federal and State Governments,” King said.
The ACA survey forecasts the total value of construction by the private sector excluding overseas construction work, will reach approximately $72 billion in 2008 – more than double the level of 2003 and significantly above historical values.
Commercial construction is forecast to maintain an upward trend, generating $27.9 billion of work in 2008.
However, growth is expected to be moderate, with forecast rises of approximately 5% in both 2007 and 2008.
Meanwhile, the apartment building sector work is forecast to decline further by 22.3% in 2007, followed by a lower fall of 2.9% in 2008.
Ai Group’s chief executive Heather Ridout said although overall industry growth is forecast to moderate, some sectors are expected to remain strong.
“Beyond the forecast period, the new wave of Federal Government infrastructure spending foreshadowed in the May Budget will add further stimulus to infrastructure spending for 2009 to 2015,” she concluded.
Australian Property Journal
