Engineering construction activity tipped to slow in Australia

Economic growth over the next four years may take a hit from projected slumps in engineering construction activity.

Construction industry analyst and economic forecaster BIS Shrapnel say construction work is expected to slip by 11 per cent in 2015 and a further 25 per cent by 2018. 

The recent Engineering Construction in Australia report from BIS said falling investment in resources projects was a dominant factor. 

BIS Shrapnel infrastructure and mining unit senior manager Adrian Hart told the Herald Sun the key driver in the downturn in work has been the slowdown in the resource-hungry Chinese economy. 

“Resources investment has been by far the dominant driver of the 12-year engineering construction boom, and now it is the dominant driver of the bust,” he said. 

According to Mr Hart, the value of project commencements in 2013 fell to a six-year low of $78 billion.

While work that’s earmarked for the near future was still high in historical terms, it was far less than that required to sustain current levels. 

The states leading the resources boom – Western Australia and Queensland – are expected to be hit hardest by the downturn and over the next five years are predicted to suffer the biggest drops in civil engineering projects. 

In fact, annual work in Queensland is being predicted to nearly halve by 2017, and around 25 per cent for Western Australia. 

Smaller decreases are forecast for Victoria and Tasmania, but conversely, off the back of non-resources engineering work including road and passenger rail infrastructure, New South Wales is being tipped for a sustained period of construction growth.


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