Qld construction industry outlook for 2019 discouraging despite #BNE2025 projects

My colleague Nick Behrens from QEAS has published an informative post on the major projects, such as Cross River Rail and Brisbane Live, which will boost construction activity in Brisbane in future years:

The BNE 2025 projects represent a renaissance opportunity for Brisbane

Of course, not all of these projects are “shovel ready”, as they say, and won’t help us much in 2019. As I’ve noted in earlier posts, the short-term outlook is discouraging as the ABS’s December quarter 2018 construction work done estimates published last week confirmed (e.g. see chart below). We now appear to be in the downswing part of the cycle.

cwd2

In its Building Industry Outlook 2019 published earlier this year, Master Builders Queensland wrote:

Looking ahead, 2019 will be a challenging year as the total amount of work falls still further. The tightening access to finance is going to affect all parts of our industry…The effects of the government’s new restrictive building industry legislation is also likely to affect the viability of new construction, causing further concern…

…Master Builders forecasts 40,000 dwelling commencements in 2019. This will be a 3 per cent drop on the anticipated total of 42,000 dwellings for 2018 and a further moderation of the record highs of the past few years. In the long-term there will be modest recovery, possibly beginning as early as 2020, but more likely 2021…

…2019 will see a fall in the demand for non-residential construction work as a number of key sources of demand move past their peak.

Regarding civil construction, QMCA’s 2019 Major Projects Pipeline Report should get a lot of media when its released on Wednesday 13 March, as it will most likely report on a discouraging short-term outlook for major projects (i.e. projects larger than $50 million which generally include large civil/engineering construction components such as major earthworks, road, rail, bridge or tunnel construction.

For more on the outlook for construction, see my posts:

Qld: hot or not?

Housing industry round table with Treasurer Frydenberg

Finally, the chart above was produced using Hadley Wickham’s amazing R package ggplot2. If you’d like to learn R and how to crunch and visualise data, you may be interested in this one-day-intensive training day I’m running on 12 April:

Data Science with R: Introduction with a focus on ABS data

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