The industry’s peak consultative body, the Australian Construction Industry Forum, has released the updated ACIF Forecasts online.
The ACIF Forecasts show a fragmented outlook for the industry, with improving prospects for one sector, a bleak time ahead for another, and the third sector set to peak soon before softening over the next decade.
The stagnant forecasts are believed to be the cumulative effect of international concerns – economic woes of the Eurozone plus slowing growth in China, India and Brazil – moderating the growth expectations for Australia.
“Depending upon work type and location, there is significant variability in how businesses are faring across the country,” said Mr Peter Barda, Executive Director of ACIF.
“The ACIF Forecasts show that many of the cycles of the past are gone. There is a new ‘normal’, and for many, it will be poor in comparison to previous buoyant times. Businesses need to plan carefully using good quality information to find their new playing field.”
Pressures of a growing population with changing demographics are said to be behind a revival for flagging residential building in most states. Significant housing shortages, estimated by National Housing Supply Council at more than 210,000 dwellings, are expected to gain some relief over the next five years, however the pain and the joy continue to be spread unevenly.
The ACIF Forecasts revealed residential building in New South Wales has been weak over the past 10 years but will enjoy some relief in 2012-13 with an expected $17 billion in residential work, with good news also for Western Australia and Queensland. New work will be mainly in units and townhouses as higher density living continues to grow in popularity. The boom in Victoria is at an end, and overall demand in that market is retreating, and a similar lowering of demand will be experienced in all other states.
Demand for building and refurbishment of non-residential buildings remains flat as clients delay and cancel projects, in part due to credit pressures. The Federal Government’s Building the Education Revolution (BER) provided a much needed uplift however as this ends in 2013-14, the sector will experience a decline in real terms unless work can be found to pull in out of the GFC-inspired slump.
The ACIF Forecasts indicate that engineering construction will reach a peak in 2014 at $120 billion per year as construction for the resources sector tapers off. Global uncertainties over demand for minerals has seen some major projects put on hold, while a surprisingly high level of work remains in water and sewerage. Thanks to initiatives such as the Carbon Price Mechanism, National Broadband Network and the Renewable Energy Target scheme, this sector will continue to be the most productive industry sector for the next seven years.
The changing demand patterns and work types in the industry are predicted to have a large effect on construction industry employment, with declining requirements for high skilled workers over the forecast period, with growing needs for tradespeople and low skilled workers. The type of work available, with the majority being regional engineering construction rather than urban residential and non-residential building, has seen a reduction in the number of apprenticeships available, which will have long term impacts on the skills of the industry.
