ACIF Forecasts the Outlook for Construction is ‘Steady as she Goes’
23 May 2019
The latest industry
forecasts indicate that
building and construction work activity in 2018-19 will fall by 5% to
$239 billion. The outlook for building and construction activity will be
finely balanced, with the current uptick in
Non-Residential Building
activity combined with surging
Engineering Construction activity
expected to largely offset the downturn in
Residential Building
activity.
“The recent upturn in Non-Residential Building has offset falls in
Residential Building activity. While this has been quite important in
sustaining workflow, it must be recognised that Non-Residential Building
activity will not be enough by itself to offset the declines in
Residential Building activity.” said Bob Richardson, Chair of
ACIF’s
Construction Forecasting Council, which oversees the production of the
ACIF Forecasts.
Residential Building Activity
Residential Building activity is already in decline with a contraction
of 1.5% is expected this year (2018-19), bringing the value of work done
to $103 billion. Recent falls in house prices and deteriorating market
conditions are expected to drive steeper falls in Residential Building
activity with the value of building work projected to fall to $91
billion by 2020-21.
Non-Residential Building Activity
In contrast to the Residential Building market, Non-Residential Building
is midway through a growth phase, with the value of work rising by 11%
last year (2017-18) to reach $42 billion. Expanded investment in
accommodation, offices, and other commercial
buildings has buoyed Non- Residential Building activity. Government
and public sector investment are also supporting growth especially in
education, defence and community facility projects.
Engineering Construction Activity
Work done in Engineering Construction grew by 21% last year to reach $67
billion. Continued strong growth is forecast, raising work done to $76
billion in 2020-21. Significant and sustained increases in construction
of transport infrastructure and in utilities projects is underway and
gathering momentum. Heavy industry including
mining is expected to see a reduction of $11 billion in the value of
work done this year but is forecast to recover and grow at 6-8% per
annum over the next two years.
Building and Construction Employment
Employment in building and construction activities is expected to lose
29,000 jobs this year, falling to 1.1 million jobs. This accounts for
9.2% of expected employment across the Australian economy in 2018-19.
Construction employment is projected to hover around 1.15 million jobs
over the next three-to-four year period, reflecting expectations that
workers displaced from the cyclical downturn in Residential Building
activity will be largely soaked up through burgeoning Engineering
Construction activity and continuation of the upturn in Non- Residential
Building activity.
Industry Outlook
Although the downturn in the residential market may spill over into the
rest of the economy reducing consumer confidence, eroding already
fragile investment intentions, and dragging down growth - the level of
total building and construction work is projected to stabilise and hover
around $240 billion a year over the next two-to-three years.
The ACIF Forecasts are available from Australian Construction Industry Forum from today. Available in two formats: Australian Construction Market Report, a 100-page expert analysis on the economy and industry sectors ($300), plus the Customised Forecasts Dashboard ($250), an online portal where users can query the full ACIF Forecasts database on 20 work types, over a twenty year period. As an industry not-for-profit, ACIF produces this information to assist businesses and governments at all three levels navigate the rapidly changing marketplace and help them plan for the future. Find out more at www.acif.com.au/forecasts.
--ENDS--
Source: Australian Construction Industry Forum - www.acif.com.au
Contact: N/A
External Links: www.acif.com.au/forecasts
Recent news by: Australian Construction Industry Forum (ACIF)