Australia has done well in controlling the coronavirus outbreak. Thus, we expect the main construction sectors to record medium growth, unlike other similar markets, which have seen negative growth. As per the Q4 2021 Global Construction Survey, Australia’s construction industry is predicted to increase by 10.6% to achieve AUD 163,797 million in 2022.
In 2021, the forecast for this industry was 1.8% growth. Now, in 2022, the construction industry is predicted to have expanded by 2.2 percent. Construction is the 3rd biggest industry in Australia of the number of individuals it engages and its share in the country’s Gross Domestic Product.
In 2019, more than 1.15 million people were engaged in the construction industry, which is nearly 9 percent of all the jobs in Australia. The Construction industry is aimed at the construction, renovation, demolition, repair, or maintenance of infrastructure and buildings. It covers a variety of services, from surveying and planning to build structures to finishing services like decorating and painting.
If you want to know details about the construction industry forecast for Australia, then this article will help you. It is because we will elaborately discuss all the construction industry predictions for Australia in this article. So, without wasting any more time, let’s go straight to the main discussion.
Top Construction Industry Predictions for Australia
The Construction industry produces more than $360 billion in revenue, generating about 9% of the Gross Domestic Product of Australia. This industry has a predicted annual growth rate of 2.4% within 2025. The market is projected to grow at a compound annual growth rate of around 8% from 2022 to 2027.
Also, the construction sector in Australia is projected to record a compound annual growth rate of 5.4% to reach 253.1 billion Australian Dollars by 2024. The residential construction sector in value terms rose at a compound annual growth rate of 3.3% between 2015 to 2019.
The commercial building construction industry, in value terms, is projected to record a compound annual growth rate of 5.9% within 2024. The worth of the construction works in Australia in the fiscal year of 2019 stood at 212.85 billion Australian Dollars.
In that 212.85 billion Australian Dollars, the total worth of private-sector construction activity done across the country amounted to around AUD 109.7 billion. It was a drop from the highest value in 2018, which was 113.11 billion Australian Dollars. On the other hand, the public sector construction activity done all over Australia in 2019 is worth around AUD 13.9 billion.
The worth of the public sector construction was comparatively lesser than the worth of the private sector construction. Combinedly these sectors cover non-residential building, residential building, and engineering construction work. We have found out that engineering construction work, which covers infrastructure, was the major of the three.
Most businesses in the construction industry are either extremely small or sole traders, employing less than twenty people. They are also most likely to be Australian-owned, with sales happening in the domestic market. However, construction materials are progressively imported from overseas.
The construction industry is heavily controlled in several occupations and sectors, with rules at each level of government. The VET industry plays a crucial part in the licensing of several professions in this industry, with regulators needing the completion of VET programs or subjects to provide licenses.
The construction sector varies from most other sectors in that several states manage training levy projects for construction via industry training boards. The training levy projects are applied as a part of the expenses of a construction project. However, there are differences between all the states as to how the levy projects work.
The money collected via the levy project is available to cover training expenses for workers in the sector. As per the Australian Bureau of Statistics, the entire value of construction activity done in Australia increased by 3.6% year on year in Q3 2021. It is supported by progress in both the building construction works and civil engineering activities.
The building construction works have increased 3.2% year on year, and the civil engineering activities have increased 4.3% year on year in Q3 2021. Cumulatively, the value increased by 1.5% year on year in the first 3 quarters of 2021. The construction industry is projected to rise by 4.7% in 2022, exceeding its pre-pandemic output levels.
Australian construction output this year would be supported in part by expenses, which were delayed during the 2nd half of the previous year because of lockdown restrictions. Encouraging development in important indicators further supports the industry’s positive perspective, with building approval recording double-digit increases through the first 9 months of 2021.
According to the Australian Bureau of Statistics, the entire value of buildings permitted in the country increased by 24.5% year on year in the first 3 quarters of 2021, supported by an increase in both non-residential and residential building approvals.
The Australian construction sector is predicted to register a yearly average development of 3% between 2023-2026. This prediction is supported by investments in transport, housing, Liquefied Natural Gas, renewable energy, and mining projects.
As part of its FY 2021/2022 Budget, released in May last year, the Australian government declared an extra investment of 15.2 billion Australian Dollars on infrastructure projects over the following 10 years. This rise brings the Australian government’s ten years infrastructure pipeline to an entire investment of 110 billion Australian Dollars.
Conclusion
It is actually a tough task to predict the construction industry forecast for any country. The same thing goes for Australia. Particularly, for the Covid-19 pandemic, it has become a more difficult task. However, things are becoming normal now, and it has become easier to predict the industry forecast now. The construction industry in Australia is growing now after the loss it faced due to the Covid-19 pandemic.
The Australian government announced extra funding of 2.3 billion Australian Dollars for existing and new infrastructure schemes through the fiscal year 2021/2022 Budget, released in December 2021. It will help to do the economic recovery and support jobs in the construction industry
