Over the past few years, the Australian Construction industry has had mixed results.This year is expected to be prosperous with the industry anticipated to grow and perform exceptionally well. While over the last 12 months the construction industry has taken a few hits, individual sectors like apartment building and housing have still performed well.
The national construction industry expanded for a fifth consecutive month in October 2014 according to a survey conducted by the Australian Industry Group. However, in November the industry moved back into negative territory.
“The seasonally adjusted Australian Industry Group/Housing Industry Association Australian Performance of Construction Index (Australian PCI) dropp[ed] 8.0 points to 45.4 points in the month,”
“The fall in the Australian PCI in November to a level below the critical 50 points threshold (that separates expansion from contraction), signalled the industry’s first decline since May 2014,” the report stated.
One of the highest performing sectors in the industry was apartment building. This sector continued to expand solidly at a rate that was broadly unchanged from the previous month, while continued strength was seen throughout the house building sector, however, growth was moderate.
Commercial construction grew slightly throughout October, while engineering construction declined for a fourth consecutive month.
As Australia’s economy is growing, the country is expecting a boom in housing construction due to strong conditions in the market.
New South Wales is leading the charge, with housing construction at an all time high. According to an article by Sourceable, “housing starts [are] expected to reach a massive 48,680 (HIA forecasts) this year before rising to 50,870 next year.”
According to a report by ACIF, they forecast that New South Wales “has had strong growth over the past six months, and is predicted to overtake Queensland as the State with the most construction spending by 2016-17.”
Victoria has had a gloomy outlook for the last few years but the State seems to defy expectations with high levels of building activity. The State is proving that housing construction is not dead with a ground-breaking effort of almost 54,000 homes in 2014.
Although, there are strong conditions in housing construction, not much can be said for all States.
The industry will remain at modest levels in South Australia after the State’s economy has been slow moving due to job losses in manufacturing and automotive sectors. The industry is also set to fall back in the ACT after the State had a significant boom over the course of several years.
As a number of projects are set to begin over the next 12 months, employment is on the rise within the industry providing many opportunities for a number of different organisations.
Melbourne’s rail link is set to commence as well as a number of projects in Western Australia which will see the construction of a number of treatment plants and the extension and upgrade of West Pilbara, Cape Lambert.
Although there seems to be growth in construction, hopefully 2015 will have a positive flow-on effect to the manufacturing industry. The Australian economy is performing well overall and with new projects commencing this year these industries should see stability returning.