Australia is projected to experience a construction slowdown over the next five years, with residential development poised to be the most active sector. In contrast, Timetric forecasts weaker levels of industrial and infrastructure investment, translating into a 3.5 per cent average annual decrease.
Countrywide construction output totalled US $191.3 billion in 2014, but that tally is expected to drop to US $170.2 billion by 2019. The decline is attributed to the lagging mining sector, low investment in the energy sector and ambiguity over renewable energy targets, which were subject to a government review last year.
The Australian government has lined up approximately US $56 billion in other infrastructure spending, including $45.5 billion for vital transport projects by 2020. The remaining $10.5 billion is earmarked for various long-term infrastructure projects, such as $4.5 billion designated for the Asset Recycling Initiative.
Meanwhile, residential construction surged in 2014 as unit production jumped nearly 12 per cent from 2013 — a trend that is expected to continue due to many of the same factors driving Canada’s market.
“Low interest rates, migration to urban regions and the rising population are expected to drive the market’s expansion up to 2019,” says Sina Zavertha, an economist with Timetric’s Construction Intelligence Center.