ACIF Forecasts - May 201618 May 2016
The Australian Construction Industry Forum (ACIF) has released its building and construction industry forecasts for May 2016, identifying the highs and lows of an industry in transition.
ACIF has identified the following highlights from the reports:
- There has been a second consecutive 5% annual fall in total or aggregate activity, reducing 2015–16 total construction activity by $12 billion to $212 billion.
- The building and construction industry has played a key role in the transition of our economy away from resources towards a more diversified economy.
- The industry ramped up Residential Building following the mining boom, but that too has almost hit its peak. Building work is expected to top $91 billion in real terms in 2016–17 before eventually slowing and slipping into a decline, with an anticipated fall of 6% in 2018–19.
- The level of construction activity that was projected in each year into the next three has been reduced by $5–10 billion, largely reflecting a deeper dip in Residential Building and a more stringent downgrade to the outlook in Engineering Construction.
- On the upside, Non-Residential Building work is growing. After a modest contraction forecast in Non-Residential Building activity for 2015–16, ACIF forecast that there will be a small increase next year and more fulsome growth – close to 3% per annum – by 2017–18.
- However, this growth forecast is not consistent across the country, with states such as New South Wales, Victoria and Tasmania experiencing growth in the Non-Residential Building Sector in 2014–15 and expecting to see growth again in 2015–16; and the mining-related states of Western Australia and Queensland anticipating subdued growth.
- The May 2016 ACIF Forecasts have upgraded projections for Accommodation, Entertainment and Recreation and Retail/Wholesale Trade but downgraded for Health and Aged Care and Offices, especially where this was in support of mining or mining-related activity.
- Engineering Construction activity fell by 15% in 2014–15, but is only about a third of the way into a projected 46% fall in activity that will bottom out by 2017–18.
- While mining and related construction is in decline, increased infrastructure construction is underway in Roads and Telecommunications, and there are further plans for major rail and light rail projects.