Australia’s construction industry will contract by 2.4% in 2019, but will regain its growth momentum in 2020, according to a report from data analytics and consulting company GlobalData
According to the report, the industry is expected to remain weak in 2019 with an outturn that partly reflects a lull in activity in the construction of major energy projects but also a downturn in the residential sector.
Danny Richards, construction analyst at GlobalData, said, “Residential construction accounted for 36% of the Australian construction industry’s total value in 2018.
“The residential sector has been expanding rapidly in recent years, but the consequent oversupply of residential buildings as well as tighter lending conditions will hamper the sector in the coming years, and by 2023 it will account for less than 32% of the industry’s total value.”
However, the Construction in Australia – Key Trends and Opportunities by State and Territory to 2023 report indicates that the industry’s output value in real terms is expected to rise at a compound annual growth rate of 2.14% over the 2019-2023 forecast period, compared to -1.59% during the review period (2014–2018).
Richards added, “The improvement will be driven by investments in transport infrastructure, with the government planning to invest 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.”