The state economy is transitioning from the record peak of a “once in a generation” investment boom and engineering construction activity has already fallen in line with declining resources investment and capital spending on public infrastructure.
The decline in engineering construction work has primarily resulted from the impending completion of three LNG projects in the Gladstone region.
Engineering construction work in the area is expected to fall from a peak of $10.3 billion in 2012-13 to $300 million in 2016-17, accounting for a substantial portion of the predicted 65% decrease in state-wide major project work over this period.
“Our industry is currently undergoing a major transition with the construction phase of the LNG boom now tapering off. However it’s important that construction workers and employers, along with career seekers understand that we are still well positioned for the next five years,” CSQ chief operating officer Paul Hodgson said.
“Now is the time for government to invest in infrastructure and bring forward public investment to soften the impact of the sharp downturn in private investment, to help smooth the cycle.
“The sector is resilient but it is important to keep our skilled workers in Queensland. There is a pipeline of works across the state, including projects such as the Toowoomba Second Range Crossing and the Gateway Upgrade North, and there is some light at the end of the tunnel with a potential upswing in 2016-17.”
The engineering construction sector of the industry could potentially experience another upswing if Adani Mining’s proposed Carmichael coal mine in the Galilee Basin goes ahead as well as a number of upstream LNG projects in the Surat Basin, although neither development is a sure thing.
“Over the next five years there will a number of factors impacting on the local construction industry which are beyond our control such as commodity prices, government revenues, the Australian dollar and the economies of our major trading partners,” Hodgson said.
“Offsetting the decline in engineering construction work we have seen a lift in residential activity over the last 12 months and this is set to continue.
“We want to encourage our workers to stay in the industry, and the best way we can boost our productivity is by investing in training and ensuring our workforce is up to date with cutting edge building practices,” he said.
The groups said there is a role for governments to bring forward investment in public infrastructure to soften the impact of the sharp downturn in private investment and sustain the industry’s ability to respond once private investment does return.
It wants the state government to smooth the cycle, with governments investing in projects that make economic sense.
Last year Construction Skills Queensland announced a $45 million plan, which included attracting new entrants to the industry and building the skills of existing workers.