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||86 Pages
Delivery time: 1-2 business days
|Construction in Australia - Key Trends and Opportunities by State and Territory to 2023|
|Published: April 1, 2019||Content info: 86 Pages||
Following a period of negative growth during 2014-2016, construction activities in Australia picked up sharply in the second quarter of 2017, with the last stage of work on the multi-billion Gorgon project providing a spurt, along with the ongoing work on the Wheatstone and the Ichthys Liquefied Natural Gas (LNG) projects. As a result, construction work grew by 8.1% and 31.5% in chain volume measures in the second and third quarter of 2017 respectively, and by 10.7% for the entire year.
However, the construction industry suffered a downturn in 2018, contracting by an estimated 2.8% in real terms, reflecting a sharp drop in activity in the oil and gas sector as major projects were completed. The industry's output value, measured at constant 2017 US dollar exchange rates, declined from US$171.5 billion in 2017 to US$166.7 billion in 2018. The industry is expected to remain weak in 2019, 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.
The total construction project pipeline in Australia including all mega projects with a value above US$25 million - stands at AUD1.4 trillion (US$1.1 trillion). The pipeline, which includes all projects from pre-planning to execution, is relatively balanced, with 52.6% of the pipeline value being in projects in the pre-planning and planning stages as of April 2019.
The industry's output value in real terms is expected to rise at a compound annual growth rate (CAGR) of 2.73% over the forecast period, compared to -1.38% during the review period (2014-2018). The industry is consequently expected to rise from a value of US$166.7 billion in 2018 to US$190.7 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 35.4% of its total value in 2018. The market is expected to decrease in importance over the forecast period, to account for 30.5% of the industry's total value in 2023; this is due to oversupply of residential buildings in line with the declining number of residential building permits issued. Energy and utilities construction accounted for 20.4% of the industry's total output in 2018, followed by infrastructure construction with 14.9%, commercial construction with 14.1%, industrial construction with 8.3% and institutional construction with 6.9%.