Will the infrastructure boom be bigger than the mining boom?Posted on March 14th, 2018 in Infrastructure
Australia is spending more on infrastructure now than at any time in the past 30 years – almost $100 billion this financial year alone, according to the Reserve Bank of Australia (RBA). And the next few years are likely to be even bigger.
With the population expected to exceed 30 million by 2030, three-quarters of growth being in the four big cities, large-scale public infrastructure projects are being pushed to the fore to accommodate these rising numbers and prevent congestion.
What’s in the pipeline?
The public infrastructure pipeline is valued at over $100 billion. There are more than 20 large-scale projects costing over $2 billion that are currently being built or are in the planning stage, as well as dozens of smaller but still significant developments such as hospitals, ports, prisons and schools.
Some of the biggest investments include:
- Cross River Rail – construction on Brisbane’s $5.4bn underground rail project began in October, linking Dutton Park and Bowen Hills.
- Inland Rail – 500km of new rail corridor will link with 1,200km of existing lines to connect Melbourne and Brisbane in under 24 hours, for public funding of $8.4bn.
- Melbourne Metro Rail Project – Melbourne’s underground rail tunnel is set to open in 2026 and is estimated to cost $11bn.
- Sydney Metro – Stage 1 of Sydney’s rapid transit system is scheduled to open next year, costing $8.3bn. The rest of the network will complete through the 2020s.
- Western Sydney Airport – Sydney’s second airport will begin construction later this year. It’s scheduled to complete in 2026 for an investment of $5.3bn.
- WestConnex – Australia’s biggest infrastructure investment, Sydney’s controversial tollway has direct costs of $16.8bn and associated costs that could run up to $45bn.
With so many infrastructure projects happening at once, construction jobs are being created in record numbers. The Australian Bureau of Statistics recorded 64,400 new construction jobs in the second quarter of 2017 alone, contributing to the strongest overall growth in employment since the Sydney Olympics in 2000.
Demand is so high for qualified and experienced workers that construction firms are struggling to fill vacancies. Skilled engineers and designers are being encouraged to consider a career in construction, as unlike mining – where these experts are usually only required to get projects off the ground – these skills are required all through the duration of a project.
This has led to engineering and construction being among the few industries to give pay rises in 2017-18. According to Hays, New South Wales and Queensland have the highest salaries for project managers ($190,000), followed by Victoria ($165,000) and Perth ($150,000).
Annual spending on road and rail projects alone is expected to reach $16 billion by 2020, according to Macromonitor, with transport construction set to double over the next few years. As more mining projects reach completion, a number of mining companies are expected to diversify into construction, as happened in the wake of the last mining boom.
Keep up with the latest developments and the challenges facing civil construction and infrastructure in the coming years by attending the National Construction Equipment Convention (NCEC). This three-day event is a chance to hear from industry experts and to interact face-to-face with key figures.
NCEC Australia takes place from 15-17 November 2018 at Sydney Showground, Sydney Olympic Park.
AFR. Australia’s next boom has barely started. http://www.afr.com/news/economy/australias-next-boom-has-barely-started-20170922-gympx4
The Hon Scott Morrison MP. “More and better paid jobs”, Address to the Business Council of Australia, Sydney. http://sjm.ministers.treasury.gov.au/speech/024-2017/
Hays. Construction, Architecture & Engineering salary insights. https://www.hays.com.au/salary-guide/HAYS_1896153
Macromonitor. Australian Construction Outlook. http://www.macromonitor.com.au/files/Download/macromonitor_report_transport_infrastructure_march_2017_extract.pdf