Latest industry predictions from ACIF’s May 2018 Forecast
The latest industry forecasts released recently by the Australian Construction Industry Forum (ACIF), the peak consultative body for building and construction, anticipate continued growth in the sector attributed to infrastructure and non-residential projects.
The ACIF Forecasts for May 2018, released at DesignBUILD on 3 May 2018, outline the next ten years of upcoming demand for work across the four key construction sectors, as well as what is happening with labour requirements.
The four sectors within which the industry operates, and therefore the ACIF Forecasts report on, are:
- Residential Building (houses, apartments, townhouses);
- Non-Residential Building (offices, retail, industrial, hotels, health, education and entertainment facilities);
- Infrastructure Construction (major economic infrastructure including roads, rail and ports); and
- Heavy Industrial Engineering Construction including mining resource-based projects.
Overall, the construction sector activity in 2016-17 was $225 billion and is forecast to grow to $238 billion in 2017-18 despite huge mining and resource development projects being finished. These projects are being replaced with nation-building infrastructure and non-residential building increases.
The construction industry plays a key role in contributing to the economic prosperity of the country through construction investment expenditure but also by providing the buildings and infrastructure essential to all other sectors of the economy. It is also one of the largest employers with more than 1.11 million people working in the sector.
Work Done in Building and Construction
The ACIF forecasts use the same categories as the Australian Bureau of Statistics to measure and summarise trends in aggregate building and construction activity categories.
Infrastructure Construction activity is on a rebound, if not a boom, and it is expected to grow by 10% to $62 billion next year.
Non-Residential Building activity is projected to recover this year. Non-resi has been showing strong growth in approvals over the last two years and work is expected to expand by a hefty 12% this year, lifting the value of activity to $42 billion.
Heavy Industry including mining sees a spike from the installation of the massive prelude floating LNG facility offshore from Western Australia. This is driving a temporary uplift and mining related construction is expected to continue a trend decline and ‘bottom-out’ over the next two years or so.
Residential Building includes the building of new dwellings and alterations and additions to existing dwellings. This activity has peaked and is now in decline. While the housing market is in a different stage of the cycle in each of states (and cities), the ACIF CFC expects nationwide Residential Building work to fall this year and for the fall to deepen next year to nearly 5%. This will drag Residential Building activity down from the $101 billion achieved at the peak of the ‘boom’ to $93 billion over the next 2-3 years.
About the ACIF Forecasts
ACIF forecasts are the industry’s ‘compass’ to the future. They provide rolling ten year forecasts of building and construction activity. These forecasts are a primary source of market information for the building and construction industries in Australia, providing decision makers with comprehensive information and insight to reveal the direction in which building and construction activity is heading.
These forecasts are overseen by the Construction Forecasting Council (CFC), which comprises a panel of economists and industry leaders whose wealth of experience and on-ground insights plays a valuable role in providing input into, and reviewing, the ACIF Forecasts. The ACIF Australian Construction Market Report is prepared by industry, for industry.