Australian Construction Activity to Rise 6.8% in 2018-2019

Construction workers talkingStainless steel pipe suppliers like Europress and other businesses that rely on construction will notice a higher demand for their products in Australia, due to a forecast rebound in building activity in the commercial and residential segments.

Construction projects nationwide will increase 7.1 percent in 2017-2018 and 6.8 percent in 2018-2019, according to the Australian Industry Group-Australian Constructors Association’s Construction Outlook survey.

Commercial Projects

Commercial and non-mining infrastructure work will lead the forecast increase in construction activity, after three years of weaker demand for building projects. Transportation infrastructure, such as roads and railway will support the expected pick-up in non-residential construction, apart from telecommunications infrastructure, AI Group chief executive Innes Willox said.

Engineering construction will also be a key driver for projects with an 8 percent increase in 2017-2018 and a 10.6 percent growth in 2018-2019, according to the poll. Willox said that the survey based its findings from 100 companies that employ around 60,000 people.

Residential Projects

Residential construction activity may not record the same level of growth compared to commercial projects, but market fundamentals for the sector remain steady as home builders continue to increase the backlog of projects.

Shane Garrett, Housing Industry Association senior economist, said that new home construction is still above historic figures even if they have fallen from their peak levels in the previous months. The delivery of new apartments into the rental market has been beneficial for tenants, as it lowered rental rates to a 24-year low in 2017, Garrett said.

Conclusion

An increase in commercial and residential construction activity in Australia has many benefits, ranging from more business to construction suppliers to more jobs. It also helps in bringing down rental inflation due to a higher supply of homes. What is your outlook on the construction industry for the next 12 months?