'Brighter days' ahead for non-residential construction

By Tamikah Bretzke

03 October 2016

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The non-residential side of the construction industry has been not “so cheery”, despite record levels of residential construction, but there are signs that levels could soon pick up, a senior economist has revealed.

The Australian Construction Insights (ACI) Construction Monitor report provides a detailed state-by-state analysis into conditions within the non-residential building and engineering construction sectors.

A national ranking summary suggests that Tasmania has risen to the top of ACI’s state rankings in terms of construction, while NSW has moved into second place, followed by the Northern Territory, Victoria, Queensland and the ACT respectively, with both South and Western Australia falling to the bottom of the list.

Senior economist Shane Garrett notes that while activity on the non-residential side has been “slightly stronger”, it was not enough to “make up for the shortfalls on the engineering construction side”.

“[The] ACI Construction Monitor details how engineering construction has endured a torrid few years as a result of the sharp reduction in mining investment activity,” he said.

“However, there are definite glimmers of hope. Engineering construction is close to bottoming out, and the pace of expansion in non-residential building is accelerating thanks in part to a renewed focus on important infrastructure investment by government,” he explained.

Mr Garrett concluded: “The ACI Construction Monitor forecasts that the 2016/17 financial year is expected to be the final one of contraction in non-residential construction, before modest growth returns in 2017/18.

“Brighter days lie ahead for non-residential construction.”