Australia’s construction pipeline remains strong, with 1,926 new construction projects reported for September, and the value of new commercial construction projects for September estimated to be $32 billion, which is the highest monthly figure since July 2013.
According to the latest Cordell Building Indices, the civil engineering sector continues to dominate the market, accounting for nearly 78 per cent of the total project pipeline value, thanks largely to Melbourne’s second metro tunnel, which has an estimated build cost of $23 billion.
The number of commercial projects reported for the month of September dropped from August, however, the total project value has increased 500 per cent, largely attributed to Shell’s $2 billion floating liquefied natural gas refinery moving to construction.
“We expect that this level of activity in the commercial development sector will put continued upwards pressure on the cost of construction, even though the residential market is softening and data from the Australian Bureau of Statistics indicates the residential construction boom is moving through a historic peak,” said James Shang, CoreLogic commercial research analyst.
The number of Australian construction projects entering into the construction phase slipped six per cent from August, with only two sectors registering an increase in the number of projects moving into construction.
“The industrial sector recorded the largest month-on-month increase of 12 projects and the mining sector experienced the largest fall of 43 per cent,” Shang added.
“Whilst the number of projects is trending down on a monthly, quarterly and annual basis, its important to note that from a value perspective, year-on-year projects shifting to construction phase have increased by 20 per cent and month-on-month results show a rise of 51 per cent.”