A new report analyzing project deferrals and abandonment trends, specifically within the health sector, claims that the outlook is “unequivocally positive”.
The health sector of the architecture and construction industry is likely to flourish is 2010, the BCI report predicts. The sector is likely to be buoyed by a significant increase in infrastructure expenditure by the federal and state governments, the report forecasts.
“Commercial construction in Australia is still experiencing significant challenges on account of oversupply and restricted access to commercial funding,” Matthias Krups, CEO of BCI Group, said. “These are problems that aren’t likely to go away anytime soon. So the recent bursts of public funding for the health and education sector come as a life saver for the construction industry.”
The research found that, at a national level, the sector is making continued progress, with the value of health project commencements peaking at close to $1.5 billion in Quarter 3 2009.
Through increased funding, such as the federal government’s 2009 Health and Hospitals Fund, construction in the health sector is expected to continue to grow throughout 2010.
However, between the fourth quarter 2008 and second quarter 2009 the New South Wales and Australian Capital Territory’s health sector experienced a slow down. Both the percentage of deferred and abandoned projects were higher than during the same time in the previous year, and the value of health projects commencing construction decreased. Although the economy is experiencing turbulence, the future is positive with a steady amount of construction expenditure forecasted throughout 2010.
Throughout the economic downturn the Victorian health sector has fared comparatively well. The value of projects commencing construction bounced back in Q1/ 2009, after the initial slump in the last two quarters of 2008. The percentage of deferred and abandoned projects also decreased during the first half of 2009 as the construction expenditure in the health sector increased.
The health sector in Queensland experienced a marked increase in deferred and abandoned projects over Q4/ 2008 and Q1/2009. This increase had an effect on the value of health projects being constructed in Q3/ 2009 as fewer projects were progressing to the construction stage. Although the health sector slowed down, the forecast appears positive with projects like the $1.1 billion Queensland Children’s Hospital in South Brisbane expected to commence construction early in 2010.
