Mining contracts keep large construction firms busy as apartment building falls: HIA

Construction projects at mining sites accounted for the largest portion of contracts won by Australia’s biggest construction firms in 2011-12, according to the latest Housing Industry Association-Cordell Construction 100 report.

The report, which profiles the largest 100 companies operating in engineering construction and non-residential building sectors, found that the total value of construction work done increased by 18.1% in 2011-12 to $155.4 billion.

Mining represented 28.3% of all contracts won over the year ($20 billion) – ahead of civil engineering contracts (25.6%, or $18 billion) and community building contracts (22%, or $15.7 billion).

Despite being the biggest supplier of contracts to construction firms, mining contracts are off their 2009-10 peak, when they accounted for more than 30% of all non-residential contracts.

The report also found that the benefits of the mining boom are not being uniformly felt across the industry, with only 29 of the 100 companies on the HIA list recorded having been awarded mining construction projects.

Unit and apartment made up 11.3% of contracts, worth just under $8 billion, and this segment and community building were the only industry sectors to record a decline in the value of work done over the year, posting a 3.5% fall, which detracted 0.4 percentage points from aggregate growth in work done.

Civil engineering construction work increased 14.6% over the year, adding 6 percentage points to overall aggregate value of work done over the year.

The value of community construction work done fell by 36.3% over the year and detracted 4.6 percentage points from aggregate growth, “partially reflecting government stimulus spending having worked its way through the system”.

“Mining and civil engineering construction posted strong results. However, other sectors were less impressive and work fell over the year in the multi-unit and community sectors. Overall, the positive influence of the mining sector outweighed the negatives,” says HIA chief economist Dr Harley Dale.

Source: HIA

To find out what the mining boom will mean for property investors and where the investment hotspots are likely to be, sign up for Property Observer’s free webinar with hotspotting.com.au’s Terry Ryder on Tuesday, October 2 at 12.30pm

There was only one company in the top 10 that achieved its position through involvement in only one sector. Inpex Browse only operated in mining construction and was awarded contracts for construction work valued in excess of $3.5 billion related to the development of the Ichthys Liquefied Natural Gas (LNG) Project.

This was the largest value of mining construction contracts won by any company on the list.

Downer EDI was awarded the second largest value of mining contracts, with $3.37 billion, followed by Thiess, with $3.13 billion awarded.

The report classifies mining contracts as those relating to construction undertaken on a mining site and excludes core mining activities such as drilling.

John Holland Group topped the Construction 100 with contracts for construction work worth $7.09 billion being awarded during the year, though only 15 (just over $1 billion) was mining-related work.

Source: HIA

To find out what the mining boom will mean for property investors and where the investment hotspots are likely to be, sign up for Property Observer’s free webinar with hotspotting.com.au’s Terry Ryder on Tuesday, October 2 at 12.30pm