The economic stimulus of infrastructure spending

Perth Master Precaster PERMAcast manufactured 54 T-Roff bridge beams for the Mitchell Freeway Extension.

National Precast’s CEO Sarah Bachmann says the boost to infrastructure spend by government is welcomed, but that projects must ensure economic benefit is returned to the local economy.

From materials’ supply to off-site works such as precast concrete manufacture, the impact that infrastructure projects have on long term economic growth is remarkable.

Data by the Australian Bureau of Statistics (ABS) suggests that $1 billion of investment in construction services can stimulate upwards of 5,500 direct and indirect jobs, with a combined value-added national impact estimated at $800 million. It’s why major road, rail and other infrastructure projects are key components of post-COVID fiscal stimulus packages.

The federal government is no stranger to using infrastructure spending to boost economic activity with what is now a more than $100 billion commitment over 10 years. The latest $15.2 billion infrastructure investment that was announced in the 2021 federal budget points to an infrastructure-led recovery and is indicative of the government’s ongoing commitment to the value of infrastructure investment.

According to National Precast’s Chief Executive Officer Sarah Bachmann, the boost to infrastructure spend is welcomed by her organisation’s members, however major infrastructure projects are long term projects and require careful, lengthy planning phases and implementation programmes.

Bachmann says these projects must ensure that the majority of the economic benefit is returned to the local economy and that they must factor in available labour skillsets, materials’ availability and local manufacturing capacity. And importantly, she says they must not take away from resource requirements of ongoing infrastructure repairs and maintenance.

“Major projects represent a medium to long term commitment. The lead time is substantial and if it’s immediate or short-term stimulus that is also a desired outcome, then other types of infrastructure spending should also be considered. Some examples might be social housing, bridge replacement and rail upgrades,” Bachmann comments.

“The last thing we want to be doing in this country is bolstering infrastructure spending, but at the same time driving substantial portions of the economic benefit offshore through foreign contractors. Nor do we want to see a major project absorbing an entire state’s capacity which necessitates the deferral of ongoing repairs and maintenance,” she adds.

Adelaide’s impending 10.5-kilometre Torrens to Darlington Project – the final piece of the North-South Corridor is case in point, set to be the most significant infrastructure project ever undertaken in South Australia.

“The challenge will be how to deliver the required outcomes while utilising local skills and delivering maximum economic benefit to South Australia first and then to the rest of Australia, while not negatively impacting on ongoing infrastructure works.”

Infrastructure stimulus boosts local WA manufacturing

At the height of its activity in 2017, the construction of Perth’s Mitchell Freeway Extension provided employment for more than 250 people. But as with any infrastructure project, its economic boost extended far beyond actual on-site contractors and workers.

Perth Master Precaster PERMAcast manufactured 54 T-Roff bridge beams of varying sizes for the project over a six-month period. At the time, the company invested in a new high-tech 3000-tonne stressing bed. Managing Director Alberto Ferraro says the project provided work for 25 of his workers during this time.

Master Precaster is a membership category for the National Precast members. Master Precasters are the industry’s best of the best. They are highly regarded by both peers and specifiers. They have a proven track record manufacturing high quality precast in a safe environment. They have a positive impact on the industry and broader community through responsible business practices.

Master Precaster membership members you to have been manufacturing precast for over five years and to meet the requirements of a Master Precaster Membership Audit.

To find a Master Precaster for your next project, visit: www.nationalprecast.com.au.