ACIF releases updated forecasts for construction sector

THE Australian Construction Industry Forum (ACIF) last week released its latest update to the ACIF Forecasts, saying they revealed fundamental structural changes in the economy are having a big impact on employment in the construction sector.

Engineering construction, largely driven by mining and gas developments as well as their associated rail, port, pipeline and road infrastructure, has overtaken residential building as the most important source of work and jobs for the construction industry, according to the forecasts.

The forecasts show that activity in the non-residential building sector, smashed by the GFC in 2008, is unlikely to recover to pre-GFC activity levels for several years, with this sector's long term share of GDP trending down for the foreseeable future.

"Major cities show little signs of short term recovery, except Brisbane and Perth, where vacancy rates and rental growth are offering opportunities for new CBD office building development," ACIF said, adding that the conditions are leaving builders, trades and others in the metropolitan areas under huge pressure to find work, with tender prices falling for commercial building work across the country.

"In Sydney alone, the spread of tender prices is around 25% to 30%, a clear indication of the catastrophic state of mind of builders as they struggle to win work to keep their doors open."

"The impact of this degree of change in our economy is having upon jobs is plain," says Peter Barda, Executive Director of the construction industry representative body Australian Construction Industry Forum.

Mr Barda said businesses are not taking on apprentices in the numbers that they used to, leaving no one to train the thousands of young Australians wanting to join the industry.

"The long term impact on the skills and labour within our industry will be significant," Mr Barda said.

The ACIF Forecasts show fundamental changes in work patterns for the industry. Long term, engineering construction is expected to more than double its previous long term share of GDP, while non-residential building (office, retail, industrial, education, health, etc.) is declining as a share of GDP.

ACIF said the forecasts show that there is some good news in that residential building will regain momentum in the medium term as it strives to meet the backlog of housing demand, estimated by the National Housing Supply Council at more than 210,000 dwellings.

The ACIF Forecasts have been provided by the Australian Construction Industry Forum for more than ten years as the compass to the future for the construction industry. More information is available from the Australian Construction Industry Forum (ACIF) website at <>.

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