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Concrete In Australia : September 2013
4 Concrete in Australia Vol 39 No 3 NEWS State of the concrete industry by Boyce Wong e rst quarter of 2013 saw total national pre-mixed concrete (PMC) at 5.57 million m3 -- a seasonal decline of 17.9% from the previous quarter and down 3.5% from the same time last year, as the industry slowly gears up again following the holiday period. All mainland states recorded a seasonal decline, with the largest percentage decline coming from Qld: • NSW produced the largest volume for the March 13 quarter at 1.5 million m3 (12.7% (211,600m3) and 1.5% from March 12 quarter); followed by • Vic (17.5% (305,600m3) to 1.4 million m3; 8.3% from March 12 quarter); • Qld (26.3% (463,700m3) to 1.3 million m3; 5.9% from March 12 quarter); • WA (11.1% (90,300m3) to 720,700m3; 3.0% from March 12 quarter); and • SA (16.3% (64,400m3) to 331,300m3; 1.8% from March 12 quarter). e concrete industry can expect varying degrees of fortune from state to state, dependent on the economic climate, with regards to the concrete intensive sub-sectors: • A boost in consumer con dence should see the residential sector experience positive growth, particularly Qld, NSW and WA. • e non-residential sector showing moderate growth, with signs of varying activity by sector and by state • e next phase of the federal. government s Nation Building Program is focused heavily on infrastructure construction. Industry observers are expecting the residential building sector to experience a solid recovery over the next three years, driven by low interest rates and a stability of housing prices. Qld, NSW and WA are expected to be the strong performers for the states. According to Master Builders Australia, the value of residential building work is forecast, in real terms, to grow from $46.2 billion in 2013/14 to $60.9 billion in 2015/16. According to the Construction and Property Services Industry Skills Council, the construction and property services industry -- the economy s third largest employer -- faces a skills shortage of 45,000 workers in the next three years because of a forecast rebound in residential building. Employment is expected to grow by 1.5% per year through to 2016 -- faster than overall jobs growth. BIS Shrapnel has indicated that the private sector investment is expected to support non-residential building as public sector funding declines in 2013/14, particularly in the commercial and industrial building sector. Underlying this is an improving economic climate and an easing in borrowing costs. Re ecting improving economic conditions and emerging undersupplies in various markets, commercial and industrial building is forecasted to rise 16%. An unexpected slump in construction activity -- particularly engineering construction -- has wiped $1 billion o Australia s gross domestic product in the March 13 quarter, raising fears that the transition from mining to the rest of the economy may not be as forthcoming as predicted. Finally, the ABS has reported that seasonally adjusted construction activity in Australia shrank by 2% in the rst quarter of 2013, wiping out almost all of its growth over the past year. In terms of projects in the pipeline, according to the federal budget released in May 13, under the former Gillard government, as part of the next phase of the federal government s Nation Building Program, an allocation of $24 billion to new road and rail projects has been made up to 2018/19 including $3 billion for the Melbourne Metro and $715 million for the Cross River Rail in Brisbane. ere is also new funding for major roads in Sydney, including $1.8 billion for the M4 extension and M5 duplication and $400 million for the F3- M2 "missing link" to be delivered by the NSW government. $500 million is also assigned for the Perth Light Rail Project and Airport Link over the next 10 years. However, the next phase of the Nation Building Program will not start until 2014/15 and the majority of the funding will not be allocated until early next decade. And it will also be conditional on state governments matching the funding and a new alliance with the private sector to deliver the projects. Boyce Wong is the marketing analyst for Cement Concrete & Aggregates Australia.