2019 Construction outlook

Melbourne, Australia, city skyline with many buildings under construction against a blue sky with light clouds.

While residential construction has been on the decline since the end of 2016, this has been more than offset by an increase in the industrial and health care sectors. In 2019, BCI Economics expects construction to increase by 8.2%. That said, residential building is still expected to be worth over $93 billion over the next couple of years and grow by a modest 4.3%.


Demographic factors are driving construction growth

Demographic changes are driving significant projects in the non-residential construction sector. In 2017, 3.8 million Australians were over 65 years of age, and this is expected to be 8.8 million people by 2057. To prepare for our ageing population, there is significant investment in aged care facilities. It is estimated that Australia requires $33 billion in investment into aged care facilities over the next decade to meet demand.

By 2057, it is expected there will be 8.8 million Australians over 65 years of age.

Many significant projects in the aged and healthcare industry will be delivered over the next few years supported by public funding. For example, a $55.6 million residential aged care facility in inner city Melbourne is being funded by the State Government. This is the biggest public sector investment in residential aged care in metropolitan Melbourne in over a decade. While the Federal Government has contributed towards the $90 million Karingal Green facility in Western Australia.

At the other end of the demographic spectrum, there is also considerable construction activity to support the next generation. For example, in Victoria, $1.2 billion has been committed to new schools and upgrades.



Civil infrastructure is also driving growth

State and federal governments spending on infrastructure has grown by 4%. This is directed at dealing with our burgeoning population which reached 25 million this year. It’s estimated that Melbourne’s population could reach 8 million by 2050 while Sydney will reach 9.9 million by 2036.

Over the next year, major civil infrastructure projects will continue to grow by 13.4%. There are already 22 major projects in Australia that includes $80 billion to be spent in New South Wales and $40 billion in Victoria. The major projects in place include rail initiatives like the Sydney Metro, the Melbourne Metro and Queensland’s Cross River Rail. To ease traffic congestion and link significant corridors, major road projects including the WestConnex project, the M4 Motorway Upgrade and the M80 Ring Road Upgrade are underway. The jewel in Australia’s infrastructure crown is the Western Sydney Airport which will cost over $5.3 billion in its first stage alone.

With growth comes significant opportunity in the construction industry. To make sure you have the right people on board to help your business meet the construction boom partner with an agency who understands what you need.

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