According to Chief Economist of Master Builders Australia, Shane Garrett, the need to fast-track the rollout of infrastructure projects has increased in urgency following the June quarter slump in engineering construction activity, which was at its lowest level in a decade.
As outlined in the figures released today by the Australian Bureau of Statistics (ABS), while the volume of engineering construction activity across the country only fell by 1.1 per cent in the June quarter, it means the sector has now fallen to its lowest ebb since 2008.
“Even though we’re supposed to be on the cusp of an infrastructure boom, engineering construction activity has not been this weak since the GFC,” Mr Garrett said.
“It’s a clear sign that governments are not moving fast enough to advance infrastructure commitments to the construction phase.”
But that’s not all, the new data reveals that other components of construction are also struggling. The downturn in residential building activity continued with another 5.1 per cent reduction during the June 2019 quarter. This was eclipsed by the 6.6 per cent drop in commercial building work done over the same period.
As the economy’s largest provider of full-time jobs, Mr Garrett said the new ABS figures show that the building and construction industry is ‘in real need of a lift’. He believes that the quickest way to achieve this is by governments working together to get infrastructure projects happening.
“Our recently-released Master Builders forecasts indicate that engineering construction work is likely to be a crucial lifeline for our industry over the next few years, given that both residential and commercial building are expected to struggle,” Mr Garrett said.
“A visible expansion in the amount of construction projects taking place would lift morale in the industry and show everyone that our economy is on the up again.”
During the June 2019 quarter, Western Australia was the only state to see an increase in construction activity (+1.4 per cent). The largest reduction in construction work affected the ACT (-13.1 per cent), followed by the Northern Territory (-12.3 per cent) and Queensland (-6.0 per cent). There were also declines in South Australia (-4.8 per cent), Victoria (-4.4 per cent), Tasmania (-4.1 per cent) and New South Wales (-1.9 per cent).