CoreLogic captured 2,012 development applications and proposals in the construction pipeline across Australia in November. This represents a small increase on the number of development applications captured in the previous month (+3.4%).
The number of projects added to the pipeline over November is also a higher flow than the five year average, which is approximately 1,777 new project applications per month across Australia.
Despite the end of large scale, mining-related construction in 2014, the number of new project applications added to the pipeline each month has trended upwards by an average of 30 projects since the end of 2014. The suggestion of these numbers is that construction is continually expanding.
The largest increase in the number of new projects as of November was in the community space, which includes school and hospital upgrades. This reflects the increased participation of the state governments in driving construction.
The combined value of projects captured in the pipeline over November was $19.8 billion. This combined construction value is above the 5 year average of AU$13.7 billion, and was also substantially higher than the $17.6 billion recorded in October.
The number of projects commencing is still relatively low, but is growing…
While development applications continue to thrive, the number of projects moving into construction in November was 866 – lower than the 5 year average of 1,066 projects per month.
However, the number of projects moving into construction is edging higher. The number of projects that moved into construction was 10.9% higher than the 781 that moved into construction in October. It signals recovery from September, which had the lowest number of projects move into construction over the year (669).
The construction value of projects that commenced over October rose by 31.9% on the previous month, to AU$5.0 billion. Again, this is slightly lower than the 5 year average of $5.4 billion. However, as the thriving pipeline of projects begins to move into construction, the amount of work commencing each month may rise consistently over 2018.
As the investment coming from state governments are for large-scale projects, the future construction landscape may see several, regionally dispersed opportunities that take time to manifest. It is worth noting, for example, that of the $5 billion of construction works moving into construction in November, $1.8 billion was held in an arterial road upgrades for outer-suburban Melbourne. Works on the Western Roads Upgrade will begin in 2018. Importantly, the project will be completed in stages to minimise disruption to road users, with all eight projects to be completed by 2021.