ACIF Forecasts see growth in less labour intensive areas
The latest industry forecasts predict that building and construction work activity in 2017-18 has grown to $247 billion. This level of activity rivals the peak achieved at the height of the mining boom. Building and construction activity now accounts for 14 per cent of GDP, and construction sector jobs account for nearly 10 per cent of total employment.
As Australian Construction Industry Forum (ACIF) executive director James Cameron said, “This year, the picture for the Australian construction industry is very positive. The story of the industry is intertwined with the story of the Australian economy, and both have been strong and resilient in recent years. However, in different cities and states, different sectors of the construction industry are performing at various levels of growth, and it is a mixed picture.”
The ACIF Forecasts behind this report outline the next 10 years of demand for work across the four key construction sectors, as well as what is happening with labour requirements. “The ACIF forecasts aim to foster a more informed, transparent, efficient, and respected marketplace,” Bob Richardson, chair of the Construction Forecasting Council and managing director of Xmirus, said, “and in doing so give the industry participants quality information and insights that they need to make more informed investment and business decisions”
Building and Construction Employment
Employment grew in the sector by 4.2 per cent last year, while the value of work done (i.e. spending) grew by 9.8 per cent. The divergence in changes in construction employment and spending can be explained by differences in the labour intensity of building and construction activity. Much of the increase in work done last year was in engineering construction, which is typically capital intensive — and import intensive — and increases in this type of spending do not drive similarly sized increases in construction employment.
If construction activity is largely expected to track “sideways” into the medium term, why do the ACIF November 2018 forecasts project a dip in construction employment in 2019-20? The projected decrease in employment of 1.6 per cent in 2018-19 is larger than the expected reduction in total work done (1.2 per cent) because the increases in employment from higher infrastructure spending will not offset the decreases in employment caused by the forecasted contraction in labour intensive residential building activity.
Non-Residential Building Activity
Non-residential building activity is expected to grow again next year, although the rate of growth is expected to moderate from 10 per cent to 3 per cent. This is driven by an ongoing increase in non-mining business investment. Growth hot spots are accommodation, offices, and other commercial building. Increased government consumption and public investment in health, community services, and education are also supporting growth in non-residential building next year.
Australian Construction Industry Forum is the cohesive, trusted voice of the Australian construction industry. ACIF facilitates and supports an active dialogue between the key players in residential and non-residential building, engineering construction, other industry groups, and government agencies. ACIF’s focus is on innovation, collaboration, equity, and sustainability for the industry.
ACIF Members are among the most significant associations in the industry, spanning the entire asset creation process from feasibility through design, cost planning, construction, building, and management. ACIF harnesses the resources of its members to research and develop initiatives that benefit businesses of all sizes, from the largest of construction companies to small consultancies. More information on ACIF is available at www.acif.com.au.
About ACIF Forecasts
ACIF Forecasts are rolling 10-year forecasts of demand across residential, non-residential, and engineering construction in Australia. The forecasts are prepared by respected economic modellers, using high-quality data sources, and are overseen by ACIF’s Construction Forecasting Council, an industry panel of expert analysts and researchers.
ACIF Forecasts are used by thousands of professionals each year, across the full range of stakeholders, from major organisations to small consultancies. ACIF Forecasts are available as the Australian Construction Market Report, and detailed numbers are available by subscribing to the Customised Forecasts Dashboard. The ACIF Forecasts are very cost-effective and offer a worthwhile investment for business planning.
The November 2018 Australian Construction Market Report includes easily accessed commentary, graphs, and charts covering actual data and forecast changes in building and construction activity nationally and in each state. They forecast 10 years and have data going back 20 years. This represents great value, enhanced by the inclusion of specialist reports by commercial research analysts. The forecasts cover:
- Building and construction activity in 20 categories
- A state-by-state outlook
- Employment trends in the construction industry
- How macroeconomic trends affect the construction industry
Forecast data is also available through an online portal to ACIF’s Customised Forecasts Dashboard where you can tailor you own query according to 20 work types, plus location and time horizons. The dashboard allows access to the major projects database thanks to ACIF’s partner CoreLogic.
More information about ACIF is available on https://www.acif.com.au/forecasts/forecasts
THE ACIF Forecasts are available from the Australian Construction Industry Forum in two formats: Australian Construction Market Report, a 90-plus-page expert analysis on the economy and industry sectors ($300), plus the Customised Forecasts Dashboard ($250), and an online portal where users can query the full ACIF Forecasts database on 20 work types, over a 30-year period (20 back and 10 forward). The ACMR and the dashboard are also available for purchase as a discounted package for $500. As an industry not-for-profit, ACIF produces this information to help businesses and governments at all three levels navigate the rapidly changing marketplace and help them plan for the future.