Not all doom and gloom for Australia’s construction industry


The construction industry is constantly evolving in Australia, thanks in part to the quickly changing nature of the national economy. As a construction equipment hire company, at National Plant & Equipment we keep our finger on the pulse of this turbulent sector, and with this in mind, we've highlighted some of the key performance trends of the industry over the last couple of years. Here's a look back at recent Australian construction industry performance.

Changes and predictions for the Construction Industry

While the projections for construction activity over 2014-15 are slightly down from those in 2013-14, the outlook for the past year was optimistic overall. It was expected that construction activity would taper off in certain sectors, but this would be balanced by an increase in others.

The mining construction boom had brought some much needed growth to the industry, but at the start of 2014 this growth began falling, as the global demand for Australia's resources began to slow down. This moderation in mining activity and lack of new investment in supporting infrastructure saw a decrease in spending in the engineering construction sector, as many large-scale mining projects came to an end.

In comparison, key domestic markets were predicted to heat up, with population growth, low interest rates, and more affordable housing all contributing to a surge in residential building expenditure. Similarly, low interest rates were expected to also have an effect on non-residential spending.

2014: The year so far

These predictions proved to have merit, as in mid-2014 the national construction sector was lifted into growth territory for the first time this year, thanks to improvements in the house building sector. As expected, this sector saw excellent growth while others faltered, giving the industry a much needed boost after a slow start to the year.

Surprisingly, spending in engineering construction also jumped, despite predictions to the contrary. This was thanks to a pipeline of infrastructure work taking place on the east coast. However, while this unexpected jump was most welcome, it was purely thanks to local government projects. New orders in the engineering construction sub-sector decreased as the mining construction boom declined further, and the prediction is one of continued weakness in this sector.

Productivity in Construction

While the global economic outlook for Australia is currently strong, and experts remain positive about the future, perhaps more could be done to increase growth and improve performance.

While performing on par with the broader market sector over the past few years, productivity in the Australian construction industry is regularly low. An improvement in productivity in the industry, even a very small one, would make a huge difference in terms of national benefits - some place figures in the billions of dollars for just 1 or 2% greater productivity.

So, what’s next for the nation and companies like National Plant & Equipment

As one of Australia’s leading providers of heavy machinery and earthmoving equipment, National Plant & Equipment is committed to growing the construction industry, whether it be through the adoption of new technologies or investment in workforce skills through training.

With offices in Newcastle, Perth, Karratha, Emerald and on the Gold Coast, National Plant & Equipment has flexible solutions for all your loading, hauling, grading, dozing and digging needs. We supply only reputable brands for rental or sale. Call our experienced team today on 1300 794 448.