A new report released by Construction Skills Queensland and the Queensland Major Contractors Association shows that major project activity is forecast to reach its floor in 2016/17 and then return to growth for the remainder of the decade.
More than 300 gathered for the launch of the report at the Brisbane Convention and Exhibition centre this morning, eager to see the forecast for the Queensland construction industry.
BIS Shrapnel economist Adrian Hart delivered the hard facts at the event, highlighting that Queensland is currently suffering the “worst downturn in domestic demand that we can see in ABS records”.
“This is the worst correction in domestic demand in Queensland that we since the 1930s
Major project activity in Queensland has been declining since 2012/13 following the industry reaching a historic peak of $18.7billion. As the construction phase of coal and LNG projects reached completion, major project activity began returning to normal levels.
CSQ CEO Brett Schimming said the industry was now entering a new phase, with the 2016 Major Projects Report predicting a revival in non-mining sectors.
“Post 2016/17, it is expected that the industry will enter a three-year recovery period,” he said.
“The growth will be driven primarily by major projects that include roads and bridges, railways and harbours, electricity, pipelines and telecoms.
“This is encouraging for the industry as many of these projects have confirmed funding and are not exposed to the same global investment risks as resource projects.”
It is anticipated that Queensland’s road and bridges sector will surge from 2016/17. The project pipeline includes the Kingsford Smith Drive and Caloundra to Sunshine Motorway upgrades, the Toowoomba Second Range Crossing and the Gateway Upgrade North (GUN).
As the State and Federal Governments’ budgetary position improves, railways and harbor work is forecast to rise sharply, climbing to over $1 billion by 2019/20. Key projects include the Beerburrum to Landsborough duplication, Cross River Rail, Goonyella Coal Rail upgrades as well as projects related to the Inland Mainline Freight Upgrade – Queensland Border to Acacia Ridge.
In the electricity, pipeline and telecommunications sector, total work is forecast to climb back to $1 billion in 2018/19 and 2019/20, as the rollout of the NBN ramps up and is joined by the North East Gas Interconnector (Queensland Section) as well as a number of renewable energy projects.
According to the report, the current forecast upswing will occur at a time when other Australian states will also be undergoing increasing levels of major project investment.
During the same period, CSQ data predicts that activity in Queensland’s residential and commercial construction sectors will rise.
Mr Schimming said these factors could lead to a highly competitive environment for construction skills.
“It is vital we retain industry skills in the civil construction sector if we are going to deliver new major projects on time and maintain existing infrastructure assets,” he said.
“There is also a possibility that a recovery in the mining sector could take place in the coming years. Assuming Queensland can meet challenges on costs and competitiveness, and once global demand strengthens again, a range of mining and heavy industry projects that are currently unfunded could feasibly come back into the picture.
“This would place further demands on the state’s construction workforce.”
“At Construction Skills Queensland we have been working to meet changing industry needs.”
“We have anticipated the peaks and troughs and we’re working with industry to manage and smooth potential volatile work flow. Part of our role is we take a long term view to assist industry to forecast construction activity.”
“Despite market inconsistencies, there are some exciting large scale projects in the pipeline for Queensland and we see a strong future in the longer term as we return to normal sector growth levels. Market cycles will always dictate workflow, but the more we can plan and upskill the more stability we can contribute to workers and the economy,” he said.
“Our relationship with industry is stronger than ever and this gives us an opportunity to deliver evidence based workforce planning assistance so that Queensland has the right skills at the right time to deliver major projects.”
Download your copy of the 2016 Major Projects Report here.