Anaemic growth predicted for construction sector over next two financial years

Construction activity is not expected to recover to mining-boom levels and is due for anaemic growth – or real-terms decline – over the next two financial years, according to the Australian Industry Group’s latest construction outlook survey.

Engineering and commercial construction will come crashing down from its mining-fuelled 10.6% growth spurt in 2012/13 to grow 2% this year and 1% next year.

“This reflects weaker conditions across a range of infrastructure categories and resource-based heavy industrial sectors. However, telecommunications work is forecast to remain robust in line with the NBN roll-out and related investment. Levels of construction activity are also expected to hold up reasonably well in the oil and gas sector (despite a slower growth outlook) while civil projects (such as terminals and ports) are expected to still generate solid work in 2013/14 before weakening the following year,” the survey reported.

In 2014/15 commercial construction is due to recover to above-CPI growth of 4.4%.