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One of the leading economic forecasters, BIS Shrapnel, has forecast a strong phase of road construction activity in Australia over the next three to four years and increased infrastructure activity in urban areas.

It has, however, estimated a fall in the amount of money being spent on the maintenance of the nation’s road network. The company’s outlook on the roads sector is contained in two major reports released at the end of 2014 – Road Construction in Australia 2014-2029 and Road Maintenance in Australia 2014-2029.

BIS Shrapnel’s Senior Manager Infrastructure & Mining, Adrian Hart, told Roads and Civil Works that overall, 2014-15 would end up being one of the weakest years Australia had experienced in road construction for several years.

“We’re not anywhere near where we were in the mid-2000s – we’ve come off a very strong phase of road construction activity that’s been funded by the public and private sectors; a phase that really turbocharged the whole construction market,” Mr Hart said.

“What we’ve seen over the last two years is that we’ve reached the end of a lot of key projects and, for many reasons, the next round of major projects hasn’t been ready to proceed.

“There are issues about funding, issues about which projects need to go-ahead and so we’ve been finishing projects faster than we’ve been able to start new ones.”

Mr Hart said the next few years would see some very large projects brought forward.

“We’re going to see another strong phase of road construction activity that will continue to grow right through the next three-to-four years and reach even higher levels of construction than we’ve seen in the past.”

Mr Hart said in BIS Shrapnel’s view, the state where the strongest activity would occur was New South Wales.

“They are benefiting from lower interest rates, they have a housing boom, economic activity is rising and revenue flowing to state government coffers is rising.

“One top of that, that state has been successful in privatising assets and quarantining those funds for infrastructure spending. So in our forecasts you’ll see there is a substantial increase in NSW activity because government has benefited from a stronger economy in recent times and has made decisions that have enabled it to basically develop new sources of funding through the privatisation of assets.”

Mr Hart said there were also quite significant projects in Queensland like the $1.6 billion Toowoomba Range Crossing that was expected to start within the next couple of years and there was also a lot of work to be undertaken on the Bruce Highway.

“But Queensland could hurt a little,” Mr Hart said, “because of reduced revenue, particularly with recent falls in commodity prices, which will hit royalties the government receives.”

The full article can be read in the February/March 2015 Edition of Roads & Civil Works Magazine.

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