Australian construction industry to shrink

Economic forecasting group BIS Shrapnel has projected that Australia’s civil construction industry, including roads, transport, utilities and mining, will shrink over the next few years.

In its latest report, the company says civil construction growth has more than doubled in the last five years, and further growth of 9 to 10 per cent is expected in the current financial year with the recent commencement of large transport, water and resources projects. However, as current projects are completed, there are fewer projects ready to take their place – with BIS Shrapnel projecting that civil construction activity is set to decline 6%
during 2010/11 – driving a downturn in total construction activity through the year.

Adrian Hart, Senior Manager for BIS Shrapnel’s Infrastructure and Mining Unit, claims that “while most sectors will be experiencing higher real levels of activity five years from now, there are some notable exceptions. We are forecasting that real annual construction activity in roads, bridges and water will be lower in 2013/14 than in 2008/09. To a large degree, this is a reflection of the tremendously strong levels of activity taking place in these sectors right now, but also reflects a likely change in priorities for investment through the next
five years.

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