Strong outlook for engineering construction

Solid growth has been forecast for engineering construction over the next two financial years according to the latest survey results from The Australian Industry Group/Australian Constructors Association Outlook.

The survey measured the responses of 100 companies employing almost 74,000 persons with combined turnover of $30 billion or approximately 30% of total industry activity.

Engineering construction has been predicted to achieve a growth rate of 13% in 2011/12 and 14.2% in 2012/13. 

While this growth is being driven predominately by resource related projects, the transport infrastructure, telecommunications and electrical power generation and supply sectors are also contributing to growth.

AI Group chief executive Heather Ridout said the very strong outlook for engineering construction showed that the historic surge in investment in mining and related infrastructure was back in top gear.

Other Key Findings:

• Commercial construction will continue to lag engineering construction, with the sector expected to lift 2.4% in 2011/12 before gaining some more momentum with a lift of 6.2% in 2012/13.
• Supply construction and input cost pressures remain and are expected to intensify: 68.8% of businesses reported major or moderate difficulty recruiting qualified labour in the six months to September, while 48.4% reported the same level of difficulty when it came to sourcing building materials.
• 74.2% of companies expect moderate to major difficulty when recruiting skilled labour over the next six months.
• Companies are reporting significant rises in input costs with 65.7% citing moderate or major lifts in direct labour costs in the six months to September 2011.
• Total employment is expected to lift 9.1% in 2011/12.

Link to full report: http://www.aigroup.com.au/portal/site/aig/constructionoutlook/