Civil Construction activity forecast to return to sustainable levels: White Paper

A sharp rise in infrastructure investment over the last decade is now forecast to return to normal, more sustainable levels of activity in welcome news for Victoria’s civil construction industry.

That’s the central theme in a new civil sector research white paper, Civil Construction Outlook: Transport Infrastructure, released by Civil Contractors Federation Victoria.

“Infrastructure is necessarily cyclical in nature, which is why it’s always important to take a long-term view in our industry, given the long timeframes involved for civil construction projects,” CCF Victoria CEO Lisa Kinross said.

“The economic contribution our civil construction industry makes to Victoria’s economy, through transport and utilities infrastructure delivery, cannot be overstated.

“Our industry members deliver the critical enabling civil infrastructure that makes transport and transit, housing and the renewable energy transition possible. Civil infrastructure is literally the foundations of our cities, towns, suburbs and communities.”

CCF Victoria’s white paper, produced by Oxford Economics Australia, shows significant forward pipeline opportunities remain for civil contractors, despite the forecast slowdown.

Fig. 1 Civil construction work completed, Victoria, $Billion (Current Dollars)

Other key findings include:

• Transport construction activity is expected to peak at $16 billion in FY25;
• The five-year pipeline of transport infrastructure projects up to 2030 is projected to be worth $66 billion;
• Up to 40 per cent more infrastructure growth for residential subdivisions over the next five years to address the Housing crisis, and;
• Increased construction activity in freight rail as the Government continues to shift freight off roads and onto the rail network.

“Of the four key civil sectors – Housing and Land Development;  Transport; Energy & Utilities; and Water and Sewerage – Transport remains the most substantial projected outlook of work – at least for the next five years,” Ms Kinross said.

“However, public investment will not be all on roads and transport. Our industry will continue building the enabling infrastructure for energy and housing and our critical focus is as much on supporting the Government to achieve its infrastructure objectives.”

But none of the forecasts were without challenges, Ms Kinross said.

“Uncertainty around major projects like the Suburban Rail Loop could impact activity and over-reliance on Government funding, plus economic factors pose risks amid potential budget cuts, while contractor insolvencies remain a real risk.

“But, where there are such risks and challenges, there are also potential solutions, for example optimising funding of projects and simplifying procurement processes to support a sustainable construction industry.

“More equitable investment in skills – reversing cuts to independent training organisations – and fostering collaboration with educational institutions for skills alignment will significantly enhance industry accessibility, affordability in skills development and, in turn, productivity.

“Civil contractors have demonstrated significant resilience over the last five years requiring many innovative pivots to the challenges faced.

“The season of ‘normalisation’ of government spend reducing in infrastructure is no different.  There’s every reason to remain optimistic and resolute in our shared focus to deliver the enabling infrastructure that the Victorian community relies on,” she added.

Download the White Paper at: www.ccfvic.com.au/position-papers/

Civil Construction activity to return to sustainable levels

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