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Infrastructure Construction is Largest Construction Market in Australia, Reports Timetric

07 Sep 2012 • by Natalie Aster

During 2008–2009, the global financial crisis led to many independent lenders withdrawing from the capital market due to difficulties with regards to raising funds. The Australian construction industry faced the specific challenge of increasing costs when obtaining debt financing. Consequently, the industry’s growth rate declined to 1.8% in 2009 compared with 15.1% in 2008. However, the announcement of stimulus packages announced in the 2009–2010 budget had a positive impact on many areas of the economy. Notably, the schools building package provided support to the institutional construction market during a time when obtaining finance was problematic. The Australian government is anticipated to spend on improvements to the education system over the next three-years under the Building Education Revolution (BER) scheme.

In 2012, the Australian construction industry is expected to recover and stabilize as a consequence of large-scale government stimulus packages, aimed at increasing infrastructure expenditure, creating jobs and easing the availability of credit. Australia’s mining industry is anticipated to be a key growth driver for the economy over the forecast period (2012–2016), during which time private-sector construction expenditure is also anticipated to improve. Both these factors are likely to have a positive impact on the industry by creating jobs and access to credit, which is anticipated to support the housing construction and infrastructure construction markets. Over the forecast period, Timetric expects the Australian construction industry to increase at a CAGR of 6.1%.

The new report "Construction in Australia – Key Trends and Opportunities to 2016" by Timetric states that infrastructure construction was the largest construction market, recording a share of 42.6%. Moreover, the market was the fastest-growing in the industry, posting a CAGR of 13.1% during the review period (2007–2011). Despite difficult economic conditions in 2010, the market grew by 12.8% and was supported by government measures to stimulate infrastructure spending in its 2010–2011 budgets. Over the forecast period, the market is expected to register a decelerated CAGR of 9.5%.

Report Details:

Construction in Australia – Key Trends and Opportunities to 2016
Published: August, 2012
Pages: 252
Price: US$ 1,950.00

Residential construction posted a share of 32.4% during the review period, making it the second-largest construction market during the review period, growing at a CAGR of 1.9%. Australia’s population is growing by 1.2% annually, a higher rate than many developed countries. Such population growth, coupled with a severe housing shortage, is expected to drive the demand for the construction of homes over the forecast period.

The commercial construction market recorded a growth of 2.3% during the review period, declining by 15.5% in 2010. Construction activity in the office buildings category decreased during the global financial crisis, prompted by contacting credit conditions which led to reductions in office building approvals. With economic conditions stabilizing and the oversupply of office building being worked off, the demand for office building is accelerating. As conditions improve, the commercial construction market is expected to grow at a CAGR of 3.43% over the forecast period.

More information can be found in the report “Construction in Australia – Key Trends and Opportunities to 2016” by Timetric.

To order the report or ask for sample pages contact [email protected]

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