Australian Infrastructure 2020

With much political debate continuing about the relative merits of increased investment in infrastructure as a vehicle to support economic growth, today's article by Mark Eggleton in the Financial Review is well timed. https://www.afr.com/companies/infrastructure/big-boom-in-spending-20191111-p539ge

Funding for new work is always welcome but as those contractors involved in mega-project delivery will rightly point out, projects need to be profitable if a healthy number of companies are to to survive and healthy competition is to be maintained.

What many might find more surprising from the article is that despite the negative headlines coming from the construction sector in recent times, the slowdown in the residential sector has seemingly already been offset elsewhere, with 100% of the cranes used in completed projects over the past 6 months being reallocated to new work in Australia.

Cranes are only one of the input costs but with a strong pipeline of work in transportation and renewable energy infrastructure already forecast into 2020 and beyond it seems unlikely that there is too much spare capacity. The political debate seems set to continue.