A report compiled by the Australian Industry Group (AI Group) shows that the resources sector remains the main driver of growth in the non-residential construction sector for 2012 and 2013.

 

According to the latest Australian Industry Group/Australian Constructors Association Construction Outlook survey, construction businesses expect the total value of engineering and commercial construction to expand 14.7 per cent in 2012, and 13.8 per cent in 2013.

 

Mining investment and heavy industrial projects, led by the oil and gas processing will drive growth in the sector by 17.1 per cent in 2012 and 15.4 per cent in 2013.

 

"Australia's engineering construction sector is powering ahead by virtue of its role in the massive scaling-up of Australia's mining capacity. This part of the industry is bursting at the seams with skill shortages widely anticipated and rising expectations of shortages of raw materials and equipment,” AI Group CEO Innes Willox said.

 

“The Construction Outlook Report also points to a tentative, although very welcome recovery in commercial construction after a particularly tough period since the Global Financial Crisis.”

 

Australian Constructors Association (ACA) President, Peter Brecht, said: "The survey underlines the continuing strong growth phase in Australia's non-residential construction industry driven by the resources sector and backed by the sustained expansion of a range of non-mining infrastructure projects.

 

The key findings of the survey include:

 

  • After a growth of 8.2% in 2011 (current prices), the latest Australian Industry Group/Australian Constructors Association Construction Outlook survey forecasts growth in the total value of engineering and commercial construction work of 14.7% in 2012 and 13.8% in 2013.  
  • This growth will be driven by engineering construction which is expected to increase by 17.1% in 2012 and 15.4% in 2013.
  •  Within engineering construction, the value of mining infrastructure work and heavy industrial resource based construction is forecast to expand at annual rates of 20% plus in 2012 and 2013.
  • Other key growth areas include telecommunications, electricity generation and supply projects and other civil projects such as port upgrades and terminals.
  • Supply constraints and input cost pressures are at high levels within the industry: Almost two-thirds (63.6%) of businesses reported major or moderate difficulty recruiting qualified labour in the six months to March 2012 while 45.4% reported the same level of difficulty when it came to sourcing building materials.
  •  A higher proportion of businesses (69.7%) expect moderate to major difficulty when recruiting skilled labour over the next six months.
  • These supply constraints are being reflected in upward pressures on costs. 78.8% of businesses expect moderate or major lifts in direct labour costs in the six months to September 2012.

 

The full report can be found here (PDF)