The number of commercial projects reported for the month of September has dropped since August, according to CoreLogic’s latest property report.But despite this, total project value increased 500 per cent over the period, which could largely be attributed to Shell’s $2 billion floating liquefied natural gas refinery moving to construction.
The report states that 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 is estimated to be $32 billion, the highest monthly figure since July 2013.
CoreLogic Commercial Research Analyst, James Shang said this level of activity in the commercial development sector will put continued upward pressure on the cost of construction, “even though the residential market is softening and data from Australian Bureau of Statistics indicates the residential construction boom is moving through a historic peak”.
The civil engineering sector continues to dominate , accounting for nearly 78 per cent of the total project pipeline value, thanks largely to Melbourne’s second metro tunnel with an estimated build cost of $23 billion.
The analysists further found that the number of Australian construction projects entering into the construction phase slipped 6 per cent from August, with only two sectors registering an increase in the number of projects moving into construction. The industrial sector also recorded the largest month-on-month increase of 12 projects and the mining sector experienced the largest fall of 43 per cent.
“Whilst the number of projects is trending down on a monthly, quarterly and annual basis, it’s 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,” explained Shang.
The full report can be found here.