Market Research Report
Construction in Australia - Key Trends and Opportunities by State and Territory to 2023
|Published by||GlobalData||Product code||703498|
|Published||Content info||109 Pages
Delivery time: 1-2 business days
|Construction in Australia - Key Trends and Opportunities by State and Territory to 2023|
|Published: June 28, 2019||Content info: 109 Pages||
The overall Australian construction industry is facing a troubled period ahead, with 2019 set to be another year of decline in total output, following the negative outturn in 2018. Although this partly reflects a lull in activity in construction on major energy projects, of greater concern is the weakness in the residential sector. However, infrastructure investment is set to strengthen, which will contribute to growth momentum over the forecast period. The election victory for the Liberal-National coalition government in the May 2019 elections ensures continuity across a range of major infrastructure development programs and projects.
The industry's output value, measured at constant 2017 US dollar exchange rates, declined from US$171.6 billion in 2017 to US$165.3 billion in 2018, reflecting a sharp drop in activity in the oil and gas sector as major projects were completed. The industry is expected to remain weak in 2019, contracting by 2.4% in real terms, before regaining growth momentum over the remainder of the forecast period (2019-2023).
The improvement will be driven by investments in transport infrastructure, with the government planning to invest AUD75.0 billion (US$58.9 billion) to develop the country's transport infrastructure by 2027-2028. Commercial and industrial projects and an improvement in consumer and investor confidence will also provide support, offsetting the downturn in residential construction.
The government has promised to invest AUD2 billion (US$1.5 billion) to construct a fast rail network between Geelong and Melbourne and AUD9.3 billion (US$6.8 billion) on the Inland Rail Project. Other notable investments include AUD7.1 billion (US$5.2 billion) for infrastructure projects in Western Sydney, of which AUD3.6 billion (US$2.64 billion) will be allocated for the Western Sydney Infrastructure Plan for road and transport connections to the new airport at Badgerys Creek and AUD3.5 billion (US$2.57 billion) for the North-South Rail Link.
The industry's output value in real terms is expected to rise at a compound annual growth rate (CAGR) of 2.14% over the forecast period, compared to -1.59% during the review period (2014-2018). The industry is consequently expected to rise from a value of US$165.3 billion in 2018 to US$183.7 billion in 2023, measured at constant 2017 US dollar exchange rates.
Residential construction was the largest market in the Australian construction industry during the review period, accounting for 36% of its total value in 2018. The market is expected to shrink over the forecast period, to account for 31.6% of the industry's total value in 2023; this reflects the rapid expansion in recent years and consequent oversupply of residential buildings, as well as tighter lending conditions. Energy and utilities construction accounted for 20.4% of the industry's total output in 2018, followed by infrastructure construction with 15.5%, commercial construction with 13.8%, industrial construction with 7.5% and institutional construction with 6.7%.
The total construction project pipeline in Australia including all mega projects with a value above US$25 million - stands at AUD1.4 trillion (US$1 trillion). The pipeline, which includes all projects from pre-planning to execution, is skewed towards early-stage projects, with 56.8% of the pipeline value being in projects in the pre-planning and planning stages as of June 2019.
The report "Construction in Australia - Key Trends and Opportunities by State and Territory to 2023", provides detailed market analysis, information and insights into the Australian construction industry, including -
This report provides a comprehensive analysis of the construction industry in Australia. It provides -