Forecasts show changing gears in building and construction
Latest industry forecasts for the building and construction industry in Australia show that the economy is changing gears, making a big impact on the one million-plus people employed in the sector.
Australian Construction Industry Forum (ACIF) is an industry peak body that researches the economic framework that drives demand for trades and professions across the industry, across residential building, non-residential building including health, education and retail, plus engineering construction for infrastructure.
“Construction is in the middle of a whirlwind of change in the global economic outlook,” said Peter Barda, Executive Director for ACIF.
“Major structural changes are shaping which industries grow and which contract, and where that activity will take place around Australia.
“ACIF Forecasts show that total spending in 2013-14 reached $231 billion, slightly lower than the $233 billion we had foreshadowed in December 2014. It is expected that construction activity will fall to $213 billion this year (2014-15). This affects businesses large and small, from architecture to building and trades, and through to facility managers and property owners.”
The macro-economic outlook and interest rate settings are driving a structural shift and churn in the mix of investment in Australia.
Significant increase in residential building is already well underway and an increase to $79 billion in for 2014-15 as a whole is factored in to the revised projections. A larger increase is factored into the projections in 2015-16, raising activity by 9 per cent.
A slight improvement in non-residential spending was observed in 2013-14 from $33 billion in 2012-13 to $35 billion. Total spending in non- residential construction is projected to dip slightly in 2014-15 reflecting soft non-mining business investment in the economy at large.
The biggest change is a reduction in engineering construction, now projected to amount to $100 billion in 2014-15, a decline of 18 per cent on spending in 2013-14. The mining development boom is very definitely over. The slide in activity in this sector will continue over the next few years, reducing spending to $86 billion by 2017-18.