15 Feb Outlook for the Construction Industry in Sydney – 2019

Sydney Construction Industry Outlook 2019

With the construction industry going from strength to strength over the past number of years, this week’s blog will detail what can be expected in 2019. We like to keep an eye on Sydney construction trends as it is important to understand what led us to our current levels. Though some area’s may see a slight slowdown this year the forecast is generally good. With construction being one of the main components in Australia’s economy, there are many different external factors which can affect the market and as such, monitoring the forecasts is a great way to see what is in store for Australia in the coming months.

Building Firms Expecting Another Busy Year

The majority of Australia’s leading building firms are expecting another busy year. The past number of years has seen rapid growth in the construction sector and though this growth is to continue, it is expected that in 2019, this growth will occur at more moderate levels than previously experienced. Taking this into account, industry levels are still estimated to reach a 6 year high of $142.8 billion.

Slowing Growth But Growing

The industry itself has seen some fluctuations over the past year however when all factors are viewed as a whole, this transpires as large-scale growth. This growth is expected to continue in 2019, however it is not expected to continue at the same rate as previous years. The main reasons for this are, the residential construction sector has been in decline since 2016, and this decline experienced its biggest loss in the final quarter of 2018. There has been a fall in investor demand and many multi-level apartment building projects have reached completion of over the past number of years. As a result, this decline is expected to continue during 2019 by 4.8%.

The Engineering Construction Sector

There has also been large scale decline in resource related engineering construction (Mining), over the last number of years. This consists of both mineral, and resource (oil, gas etc) mining, which has seen continuing decline. The largest weakness in the market is contributed to oil and gas processing sector which is expected to fall at levels of approx. 54.8%, as opposed to other mining interests which are expected to fall at a much slower pace of 7.9% during 2019 in comparison with 13.5% in 2018. It is not all bad news however, as it is only the residential market and resources industries that have been experiencing this decline, with all other areas expected to increase over the coming year.

Major Civil Engineering Construction Works

As many Sydney residents know, and as we’ve discussed before, there has been ongoing major civil engineering construction projects (eg, infrastructure, transport and utilities), underway in the city and its hinterland for a number of years. The city has invested in the light rail, bridges, tunnels and its new airport in Badgerys Creek. This development is one of the key performers in the industry with strong increases since 2016. Rates are expecting to continue to increase for the coming year by approx. 13.4%.

Commercial Building Activity

There is also growth expected to occur in commercial building activity. This includes, office, retail and industrial units. This growth is expected to increase by 6.3% and when we look to 2018, growth occurred at a level of 8.7%, it seems the trend is continuing.

Construction of Aged Care Facilities

A major factor that is to be considered is the prediction that there will be large scale investment and development in construction of aged care facilities throughout the Sydney area in 2019. Reasoning behind this aged care increase is due to increased technologies within the industry itself. This can be seen throughout Sydney with many works occurring on new facilities and updating of older facilities.

Net Employment Increase of 4.4%

All of this growth is also due to have a very positive effect on employment. Though the fall out in the mining and residential market will have a negative effect, it is very much a case of swings and roundabouts, as the increased activity in all other construction areas is set to have increased employment activity which will increase levels by approx. 4.4%. There are however some labour hire constraints expected. Many companies are reporting difficulties sourcing skilled personnel and machine operators.

Labour Hire for the Construction Industry

On that note the team at Hunter Labour Hire are always here to help with all your labour hire needs. If you are finding it difficult to source skilled personnel, be sure to contact the office on 02 8985 2019, email info@hunterlabourhire.com.au or contact us online and we will definitely be able to help in every way we can. Our rates are competitive and the standard of work supplied is always exceptional.