Retail investment drives surge in construction

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The arrival of international retailers, including Amazon and Aldi, is a key factor underpinning a forecasted surge in construction activity, according to 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.

“Of this, $6.9 billion is forecast to come from the influx of international retailers into Australia – particularly the arrival of Amazon and expansions by Costco and Aldi. The latter has plans to open another 30 stores around the country in the next 12 months,” Master Builders National Manager – Economics Matthew Pollock said.

“A positive of the forecast commercial construction surge is that growth is expected to be broad based with construction related to office space and resort and hotel accommodation also making a strong contribution,” he said.

Mr. Pollock said office space is set to make the biggest contribution, with a pipeline of projects supporting an expectation of related construction work valued at $6.8 billion in 2017-18.

“Meanwhile, tourist numbers from our neighbours in the Asian region continue to grow and will support a major influx of Asian investment into resort and hotel accommodation,” he said.

“This will be particularly beneficial for the Queensland construction sector as $9 billion of the $11.7 billion in projects waiting in the pipeline is allocated to major resort projects in Queensland,” Matthew Pollock said.

Likewise, he said health and education related construction will also boost the construction industry in some states.

“In South Australia the $247 million Health Innovations Building at the University of South Australia is a case in point, as is the reallocation of the University of Tasmania’s STEM facilities.”