With expectations of double digit growth, the long term outlook for the Transport sector is promising as significant infrastructure projects drive activity.
In the twelve months to March next year, the Construction Forecasting Council (CFC) expects the value of engineering work done on road construction to increase by 9.47% to come in at $16.850 billion. In financial year 2013/14, the forecaster believes, that figure will have reached $19.373 billion.
Work relating to bridges, railways and ports, by contrast, is expected to contract sharply this year, dropping back in the twelve months to March next year from $9.501 billion to $9.064 billion. Beyond that, however, activity on this type of infrastructure is expected to surge to almost $13 billion ($12.913 billion) in financial year 2012/13 as work gets going on projects such as the $7.2 billion Abbott Point Coal Terminal Infrastructure Development Project.
The CFC is not alone in its optimism. Survey Participants from the most recent Construction Outlook survey conducted by Australian Industry Group and Australian Constructors Association in May expect activity on road construction to grow by 10.4% in calendar 2011 followed by a further 10.2% in calendar 2012. Far from anticipating a short term decline in other forms of transport, survey participants expect rail construction to surge by 16.2% this year and then by a further 17.0% growth next year.
Queensland to lead the way
Significant levels of growth are expected in all major states except for South Australia.
In significant statewide developments, according to CFC forecasts:
• Queensland will lead the way. Activity in the sunshine state is expected to surge 27.85% in the twelve months to March next year before going into overdrive and peaking at $3.960 billion as work on Abbott Point kicks into gear. Whilst the state will continue to derive significant benefits through disaster recovery effort and associated infrastructure improvement work, these benefits will be largely cancelled out by long term delays on the Cross River Rail Project which has been put off for several years to help pay for recovery efforts.
• Strong growth prospects are also in store for Victoria. Whilst growth on activity relating to bridges, railways and ports is set for only modest growth, that relating to roads and freeways is expected to increase from $2.405 billion to $2.913 billion in the year to March 2012 before reaching $3.410 billion in financial year 2012/13. Following on from that, the value of work will surge to $4.433 in 2013/14 as work commences on the $5 billion Westlink/West Gate Bridge Alternative.
• Courtesy of projects such as the construction of 27km of dual divided carriageway between the F3 at Seahampton & the New England Highway west of Branxton ($1.13 billion) this year, activity on road construction will remain strong in New South Wales/ACT. In the year to March 2012, the value of work done is expected to grow by almost twenty percent from $4.210 billion to $5.028 billion on the way to reaching $5.558 billion in 2012/13.
Work on railways, bridges and ports, however, is expected to fall back 21.4% from $4.035 billion to $3.170 billion in the year to March before bouncing back to almost $4 billion ($3.909 billion) in financial year 2012/13.
• In Western Australia, work on roads is expected to drop back from $2.291 billion to $2.063 billion in the twelve months to March next year before returning to moderate growth thereon after. That on other forms of transport is expected to contract almost five percent over the same period before surging to $3.251 billion in 2012/13 thanks partly to the redevelopment of the Ocean Reef marina area ($500 million).
• Activity in South Australia is expected to fall back this year and remain subdued thereon after. Work on roads is set to drop from $1.057 billion to $912 million; that on railways, bridges and ports is expected to drop from $323 million to $253.15 million.
