Engineering construction at 12 year low. Action on infrastructure is needed from governments

“Last year was the weakest for engineering construction activity since 2007,” said Master Builders Chief Economist Shane Garrett.

ABS data out today indicate that the volume of engineering construction work done during 2019 dropped by 11.8% compared with the previous year to record its lowest calendar year total since 2007.

“Master Builders latest forecasts predict a substantial upswing in the volume of engineering construction work particularly on transport infrastructure in the next 12 months. But this is contingent on state and territory governments working with the Federal Government to push shovel ready projects out the door,” Shane Garrett said.

“This is a call that Master Builders has reinforced in our Pre-Budget Submission,” Shane Garrett said.

“The weak construction results come on the same day that the updated Infrastructure Priority List was published by Infrastructure Australia,” he said.

“This year’s Infrastructure Priority List is the largest ever and identifies 147 specific projects which would assist in meeting Australia’s future infrastructure needs. Of these, 42 are considered high priority projects,” Shane Garrett said.

“The new Priority List has added 37 new proposals compared with last year’s list, which call for action on transport, education, telecommunications, water and flood defences,” he said.

“With 2019 representing a particularly weak year for engineering construction, today’s Infrastructure Priority List is a timely reminder that there is no shortage of crucial projects that we could be getting on with to ensure that living standards are preserved over the years ahead,” Shane Garrett said.

“While engineering construction had a glum 2019, the same cannot be said about commercial building activity which hit a new record high last year. Residential building finished 8.1% lower during 2019,” he said.

“The newly released set of Master Builders Australia forecasts to 2024/25 envisage that a recovery in new home building activity is not too far off and that new dwelling starts will again top 200,000 by the middle of the decade,” Shane Garrett said.

“With our population set to hit the 30 million milestone by the year 2030, meeting our future building and infrastructure needs will be a huge challenge,” Shane Garrett said.

During 2019, Tasmania was the only state to see an increase in the volume of engineering construction work done (+7.4%).

The largest reduction in engineering construction work during 2019 was in the Northern Territory (-65.2%) followed by the ACT (-28.7%), Western Australia (-16.8%) and Queensland (-13.3%).

There were also reductions in the volume of engineering construction work done in New South Wales (-4.0%), Victoria (-8.1%) and South Australia (-4.5%).