Qld Infrastructure pipeline not gushing

Last Friday, Building Queensland, the state government’s semi-independent infrastructure adviser, released its latest Infrastructure Pipeline Report, which identified some interesting projects that BQ has led the development of business cases for, such as the $2 billion Brisbane Live Roma St precinct project. Such projects can’t come soon enough for the state’s construction industry, which must be viewing recent building approvals and engineering (i.e. civil) construction work yet to be done data with significant concern (see my recent post on the 2019 economic outlook and the plots below with data up to September quarter last year). Engineering construction work to be done has been declining and is at its lowest level in nearly 12 years.* Of course, that period included the mining investment boom and the mammoth $70 billion LNG terminals construction project at Curtis Island, Gladstone.


While the 2019 federal election will very likely see a change of government, and more federal dollars will likely be forthcoming for Queensland projects, those dollars will take some time to be translated to boots and Bobcats on work sites.

My colleague Nick Behrens has also posted on the latest BQ Infrastructure Pipeline Report and made similar comments at his QEAS blog:

Pipeline projects for Queensland’s economic future

At a regional level, there is a lot of pessimism being expressed about the outlook for Townsville in particular. Pete Faulkner’s excellent analysis of regional building approvals data has received a fair bit of attention. The title of his post is very telling:

Regional building approvals data confirms the collapse in Townsville

Pete observes:

…the dramatic slide in Townsville shows no sign of easing with Trend approvals now down 46.8% for the year to Nov.

Regular reader of both Pete’s blog and QEW, Townsville building industry player Glen, provided some great local insight in a comment on Pete’s post:

Scary numbers in Townsville…most of us in the industry think 2019 will actually be worse as baseline support subsides. Some of the volume the market was counting on has disappeared as existing builders stock has failed to move. The likes of Defence Housing Authority who had a long forward plan to bring new stock into the market have cut back significantly as relatively new existing stock, that pass the filters for DHA rental pool, have become available. Second point is unit construction has virtually collapsed to nothing which is a sharp contrast to pre-2016. Most existing approvals for units have lapsed as sales failed to materialise and funding was withdrawn. Unfortunately it is hard to see anything of significance in the near future that will turn the situation around.

Also on Townsville’s economic outlook, you may be interested in a recent post from CCIQ Chief Economist Marcus Smith who is also pessimistic:

Townsville is at a tipping point of regional decline

The situation for residential construction in Townsville in 2019 certainly appears grim. Let’s hope that some of the non-residential construction projects that Townsville economist Colin Dwyer referred to in his QEW guest post New Townsville come soon enough to offset the expected further contraction in residential construction in Townsville.

For more on Queensland’s and the rest of Australia’s economic outlook for 2019, please consider attending the Queensland Major Contractors Association breakfast at which I’m presenting on Friday 8 February at Victoria Park Function Centre:

QMCA February breakfast event

*The engineering work yet to be done data are available for download on the ABS website. I produced the plots using the facet wrap option in Hadley Wickham’s amazing R package ggplot2.

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