New retailers to lead drive in commercial construction


Commercial construction is forecast to surge 15 per cent this year after three years of decline.

The jump will help to offset the softening residential market.

Master Builders Australia says a jump in retail construction for the likes of Costco, Aldi and Amazon would lead to over $6.9 billion of the $41 billion in work to be done this year, up around 15 per cent from last year.

In their Building & Construction Industry Forecasts report, MBA said future investment in retail construction would depend on how well these new stores are embraced by the public.

Office-related construction in Melbourne and Sydney is forecast to account for $6.8 billion.

“Commercial building activity is expected to outperform the other construction sectors in 2017-18,” the report said.

“Commercial building approvals have risen steadily since mid-2016, up by more than 17 per cent over the 12 months to June 2017.”

“However, the outlook for the residential construction sector and the tail end of the wind down in mining related engineering construction will challenge growth in the building and construction industry in the next 12 months.”

Residential construction is tipped to drop another 8.5 per cent by the middle of 2019, mostly from apartments.

“Much of the activity during the housing construction boom over the last couple of years has come from the apartments market so it shouldn’t be too much of a surprise that much of the fall inactivity is also expected to come from this sector.”

According to the report, construction is home renovations were set to buck this trend.

“Driven primarily by cheap credit and healthy price growth, an increasing number of homeowners are choosing to invest in their home as a means of capturing greater value – a good move over the past few years given the relative capital return of property over other assets,” the report said.


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