Construction growth

25 April 2008

Australia: The value of Australia's non-residential construction industry is expected to hit a record high over the next two years. The latest Construction Outlook Survey from the Australian Constructors Association (ACA) and Australian Industry Group (AI) suggests that the value of construction and engineering work will rise by +9% this year.

The ACA predicts that the value of the industry will increase by a further +6.9% in 2007 to AUS$ 60.5 billion (US$ 45.1 billion). Total engineering construction turnover is also predicted to rise to a record level of AUS$ 37.3 billion in (US$ 27.6 billion) 2007.

The report cites strong growth demand for commodities as the main driver for the growth and it is expected that the mining sector to grow by +20.1% in 2006 and +10.1% in 2007.

ACA president Wal King said that the main challenge for the industry will be meeting the demand, “There are a significant number of projects in the advanced stages of planning in the energy, mining and minerals sector, particularly in the boom states of Queensland and Western Australia.

“The current level of commodity prices will ensure the stability of this project pipeline and this has been supported by continued growth in building and engineering work. While most major contractors have solid order books, they will have to manage the rising cost of fuel, equipment and labour carefully.”

AI chief executive Heather Ridout added, “The fact that around 80% of companies in the construction sector are reporting moderate to major difficulties in finding qualified labour highlights what has become a serious pressure point for the industry and may limit further growth.”

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