Commercial construction expected to contribute $42B to AU economy in 2017-18

Activity in the commercial construction sector is set to have the best year in more than a decade, according to forecasts from Master Builders Australia.Activity in the commercial construction sector is set to have the best year in more than a decade, according to forecasts from Master Builders Australia.

The organisation’s latest Building & Construction Industry Forecasts show that total commercial construction activity is expected to contribute $42 billion to the economy in 2017-18.

“With forecast growth of more than 14.5 per cent (equal to $5.3 billion) commercial building activity will be strong enough on its own to drag the whole industry back into positive territory for the first time in four years,” Matthew Pollock, Master Builders Australia’s National Manager Economics said.

“With a small moderation expected in the value of residential construction work and another year of consolidation in the engineering sector, the timing of this surge in commercial construction couldn’t be better.”

Mr. Pollock said new commercial construction projects will also provide job opportunities for workers who may be finishing high-density residential projects over the coming year.

“New retail related construction is expected to rise to $6.9 billion in 2017-18, led by the recent introduction of some big international retailers, including Amazon which recently built a large distribution centre in Melbourne’s Dandenong South and plans by Aldi to open another 30 stores across the country in the next 12 months,” he said.

“Looking a little further down the track, the [Australian] Government’s investment in major transport infrastructure is ramping up and will support a boom in transport related construction over the next 5 years. There are currently more than $170 billion in transports projects in the pipeline, with activity expected to peak in 2019-20.”

Mr. Pollock said Master Builders Australia has called for a greater focus on infrastructure investment to support businesses, but also to boost new housing supply and help with housing affordability.

“On the residential building front, the last three years saw unprecedented growth in new housing construction. We have built more than 200,000 new dwellings per year – a feat unmatched in our history,” he said.

“Despite the forecast showing a moderation in new dwelling construction, we expect new commencements in 2017-18 to top 195,000 and average around 185,000 thereafter. To keep pace with population growth we will need to build at least 185,000 new dwellings each year for the next five years.”


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