ABS Data Shows Slower Government Building Activity in Queensland

Men building something

The Queensland government spent less on commercial construction projects such as schools and hospitals in the 12 months to September, down 13.4 percent to $860 million out of $20.6 billion of total construction.

Data from the Australian Bureau of Statistics (ABS) showed that the figure represented less than 50 percent of the average amount in the last 10 years. It dropped 81 percent compared to the peak amount of spending in 2010 and almost broke the lowest recorded figure in 1994.

Construction Concerns

Some construction groups such as Master Builders Queensland became worried over the slump in non-residential construction. Deputy CEO Paul Bidwell said that many regional communities depend on the state government’s commercial building projects.

Several builders in these areas depend on these tax-funded construction plans, which also boost local employment, according to Bidwell. Queensland’s construction industry has struggled with declining business, partly due to weaker demand for apartments in the southeast.

Companies anticipate becoming busier with the $3 billion Queen’s Wharf development in Brisbane, although they need to wait for at least two years before noticing any significant uptick in business.

Market Outlook

Despite the situation in Queensland, the Commonwealth Bank of Australia (CBA) expects non-residential construction in Australia to thrive in 2018. Economist Katrina Clifton believes that a boom in commercial development next year will be more than enough to make up for a slowdown in the residential sector.

Suppliers of concrete crack repair products and construction equipment such as Form Direct will benefit from a rosier outlook as well, as the CBA estimated that spending on non-residential work would amount to $4.3 billion. Public infrastructure investments will reach even higher at $8.1 billion.

The Queensland government needs to reconsider how to spend more on commercial buildings projects in 2018, as analysts believe that it may offset any sluggish pace of work in the residential sector.