QLD major projects report expects increase in work from 2016–17

However, the report states that engineering and construction activities for major project work over 2015-16 is now forecast to reach a trough of just $A6.3 billion, forecasting the activity is expected to fall a further 55 per cent over the next two years from current levels.

This would see the trough in work completed 65 per cent below the 2012-13 engineering and construction peak.

The report states that this is a steeper decline than previously projected as low commodity prices and tight government finances stymie the development of unfunded projects.

Report key findings

  • A sharp drop in major project work occurred in 2013-14, with employment demand also following suit. Queensland engineering and construction for major projects fell 22 per cent in 2013-14, from a record $A18 billion in 2012-13 to $A14.7 billion, as major projects fell across all sectors.
  • Workforce demand fell 23 per cent in 2013-14, from a record 23,500 positions in 2012-13 to 18,100 positions, in line with the decline in major project work.
  • An upswing in major project work is now expected from 2016-17, rising further through to 2018-19. However, much of the next cycle of work is currently unfunded and subject to risk.
  • Resources projects are still important in generating major project work. Mining investment, though lower, will still drive more than half of all major project work done through the forecast period, with (albeit risky) projects such as the Galilee Basin and LNG projects key drivers.
  • In line with shifts in the type of projects proceeding, there will also be shifts in regional demand for skilled construction labour, with demand moving away from the Gladstone region and the Bowen Basin coalfields to South East Queensland and the Galilee Basin.
  • The next upswing in major project work in Queensland is likely to coincide with increasing demand for infrastructure investment from other Australian states as well as globally through the G20 Brisbane Action Plan.

Queensland Major Contractors Association Executive Committee member Iain Ward said “With the recent boom in major project work now fading, Queensland faces a new series of challenges and opportunities.

There is a lot which could and should be done to ensure the Queensland construction industry and economy is productive and globally competitive.

“Governments and industry need to work together to tackle productivity and competitiveness pressures facing major project development in Queensland. This includes sensible plans and processes that ensure public infrastructure is delivered in a timely and efficient manner to meet the needs of a growing state.

“From an industry perspective contractors must exhibit flexibility and innovation to meet demand. Further, appropriate investment should be made now to ensure that skills and competencies are developed and retained in the construction industry to meet the demands of future investment cycles,” he said.

To read the full report, visit the Queensland Major Contractors Association’s website.

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