Decline in commercial construction activity predicted

Staff Reporter Tuesday, 19 May 2009 1 minute read

Commercial construction and engineering activity are set to slow down in 2009 and 2010 but government infrastructure plans are expected to avert a significant contraction in the sector.

After rising by 9.9 per cent in 2008, the value of engineering and commercial construction will fall to a growth rate of just 2.3 per cent this year, according to an Australian Industry Group (Ai Group)/Australian Constructors Association survey.

A fall of 2.4 per cent is forecast for 2010.

Despite this, the total value of construction work done by the private sector is expected to remain at a high level overall, with a forecast value of $91.2 billion in 2010 – 20.8 per cent above the level of 2007.

“The survey confirms the weakening outlook for Australia’s engineering and commercial building industry as activity continues to be undermined by investment funding constraints, weak business confidence and the downturn in global demand,” Ai Group CEO Heather Ridout said.

“The survey highlights the importance of the federal government’s stimulus package. The significant public sector spend is expected to provide an important bridge for the industry until we see some bounce in private sector investment,” she said.