Construction to soar on energy, mining boom

CIVIL construction is expected to exceed $100 billion in annual expenditure for the first time on the back of a resurgent commodities boom leading to increased mining and energy infrastructure construction, says industry consultancy BIS Shrapnel.
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NCIG terminal, image courtesy of Whitehaven.

Andy Graham

A BIS report notes that civil construction work will register a 20% increase over the next two years compared with sluggish growth in the last two years at 2.8% in 2009-10 and 5% expected in 2010-11.

Mining-related civil construction – primarily in mines, ports, railways and other mining infrastructure – will nearly double between 2010 and 2014 to around $57 billion with major capacity expansions in iron ore and coal as well as new LNG projects in Queensland and Western Australia expected.

“The outlook for civil construction is now broadly positive, with large mining and energy projects spanning LNG, coal and iron ore now approved and starting to build momentum,” BIS Shrapnel infrastructure and mining senior manager Adrian Hart said.

The report states that Queensland is expected to see exponential growth with construction activity forecast to lift by 50%, mostly driven by flood reconstruction across transport and utilities as well as LNG and coal projects moving into the construction phase.

BIS forecasts moderate growth in New South Wales and South Australia, which could see an upswing in mining construction activity if the planned Olympic Dam expansion starts in 2012-13.

“However, if the project does not proceed, South Australia can only expect weak growth, led by railways, mining and heavy industry, electricity and roads,” the report notes.

Western Australia is likely to see flat growth in the near term as many construction projects, including at Worsley Alumina, Pluto LNG and Sino Iron Ore, reach completion. However, with many iron ore capacity expansions planned and increased activity at Chevron’s Gorgon project, much stronger growth is expected.

But the report warns that a major risk WA faces in the short to medium term is the loss of skilled workers to support the forthcoming boom in Queensland, particularly fly-in, fly-out construction workforces.