Mining and LNG projects to drive civil construction
BIS Shrapnel’s latest report said the outlook for civil construction is broadly positive, with large mining and energy projects responsible for the growth.
Adrian Hart.
The chief findings from Engineering Construction in Australia 2010/11 – 2024/25 are:
• Civil construction activity is expected to rise 25% over the next three years from 2010/11, with annual activity exceeding $100 billion for the first time
• Civil work done will rise around 20% over 2011/12 and 2012/13, driven by a surge in mining and LNG-related works as well as flood reconstruction efforts. This follows much weaker growth of just 2.8% in 2009/10 – and a forecast 5% for 2010/11 – as projects moved to completion following the global financial crisis.
• Annual mining related civil construction including mines, ports, railways and other infrastructure will nearly double between 2010 and 2014 to around $57 billion.
• Non-mining civil infrastructure, with the exception of railways, telecommunications and electricity, is expected to slip lower to around $46 billion through the next four years, as Federal and State Governments curb infrastructure spending to improve their financial positions and private finance for infrastructure remains constrained.
• Public sector funded work is forecast to rise marginally in 2011/12, driven mainly by reconstruction works in Queensland, before drifting down again in subsequent years. The decline is predicted to be driven by the completion of a range of capital intensive projects spanning water (desalination), sewerage, bridges and harbours which will not be completely replaced by new works.
Senior analyst for BIS’ infrastructure and mining unit Adrian Hart said “public sector funded civil work has actually doubled since 2000, from around $15 to $20 billion per annum in the early 2000s, to around $30 billion during 2009/10. This has seen us move from a period of under-investment in infrastructure to one where we are now adding to the net capital stock. But even though there remains much to do, we don’t expect these levels of activity to be sustained.
“The lack of a public sector driver will see generally weaker civil construction growth rates through the next four to five years than those experienced through the 2000s boom, despite the size and strength of the coming cycle of mining-related works.
“Skills shortages, project delays and further cost blowouts will continue to characterise activity in the sector through the next four years, further constraining growth.”
Contact: www.bis.com.au
