Hitting that mark would require average annual growth of almost 20 per cent across the surveyed projects. As predicted in February, ANZ Research does not expect the pipeline will be fully realised – although a strong rise looks inevitable.
“Businesses are pretty confident about the private capital expenditure outlook for 2021-22, Australian Bureau of Statistics data show.”
According to ANZ Research’s latest Australian Major Projects report, activity on projects worth $A100 million or more could expand to a combined value of around $A96 billion in 2023-24.
While the ramp-up in the pipeline appears slower than previously projected, near-term risks remain. The spread of COVID-19’s Delta strain has delayed the return of some certainty to the outlook.
Extended lockdowns in major Australia population centres are restricting construction activity during the current third quarter, likely putting an end to the acceleration of growth in total non-residential construction work done in the first half of 2021. The two-week construction shutdown in Melbourne and locked down regional Victorian local government areas will exacerbate this.
But, in a positive sign, businesses are pretty confident about the private capital expenditure outlook for 2021-22, Australian Bureau of Statistics (ABS) data show.
ANZ Research remains concerned about Australia’s capacity to realise such a large volume of work, particularly in the public sector-backed mega-projects valued at $A1.8 billion and above. And there are risks of further delays and cost escalations on key projects.
There are also supply-side challenges with many countries investing in infrastructure to support the economic recovery from the pandemic. This is increasing competition for the limited global pool of workers, materials and equipment.