$82bil in engineering/construction projects forecast for 2012

By Terry Ryder, 20th May 2011

The engineering & construction sector expects stronger growth this year and next, due to the number of resource and infrastructure projects in the pipeline. It expects private sector work to be worth $82.5 billion in 2012, double the level of sixyears ago.

The latest Australian Industry Group/Australian Constructors Association Outlook survey says engineering and commercial construction work, after rising 4.4% last year, will rise 9% in 2011 and 11% in 2012.

Engineering construction is expected to experience the strongest growth, with a forecast lift of 12.5% in 2011 and 13% in 2012. That amounts to an estimated $82.5 billion of private sector work in 2012, which is more than double the level six years ago.

This reflects the strong project pipeline in mining, oil & gas processing and transport infrastructure. Solid growth is also expected in the telecommunications sector as the National Broadband Network (NBN) is rolled out.

Prospects for commercial construction are likely to be more subdued with growth of just 1.2% in 2011 – but with a stronger 6% next year.

The continued weakness in commercial work (including the construction of offices, retail buildings and industrial premises) in 2011 reflects the unwinding of fiscal stimulus and weakness in private sector building activity.

The solid overall prospects for the industry is expected to add to the supply pressures that already exist, particularly for skilled labour. Seven out of 10 companies surveyed expect difficulty in recruiting qualified labour during the six months to September. Supply constraints are also putting upward pressure on input costs.

ENDS

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