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Construction activity plummeted during 2019 to 2007 levels

Australia’s construction crisis will cost $6.2 billion in remediation and associated costs, according to new research.

Last year was the weakest for Australian engineering construction activity since 2007, according to new data from the Australian Bureau of Statistics (ABS).

The data indicates the volume of engineering construction work done during 2019 dropped by 11.8 per cent compared with the previous year. It is the lowest calendar year total since 2007.

Tasmania was the only state to see an increase in the volume of engineering construction work done, improving by 7.4 per cent in 2019.

The Northern Territory saw the biggest drop at -65.2 per cent, followed by the ACT at -28.7 per cent, Western Australia at -16.8 per cent and Queensland at -13.3 per cent.

New South Wales saw a drop of four per cent, while Victoria saw an 8.1 per cent reduction, with South Australia dropping by 4.5 per cent.

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Master Builders Chief Economist Shane Garrett said its latest forecasts predict a substantial upswing in the volume of engineering construction work particularly on transport infrastructure in the next 12 months.

“But this is contingent on state and territory governments working with the Federal Government to push shovel ready projects out the door,” Garrett said.

“This is a call that Master Builders has reinforced in our Pre-Budget Submission.”

It follows the release of Infrastructure Australia’s updated Infrastructure Priority List, which identified 147 specific projects which would help Australia meet its infrastructure needs.

The updated list has added 37 new proposals, which call for action on transport, education, telecommunications, water and flood defences.

“With 2019 representing a particularly weak year for engineering construction, today’s Infrastructure Priority List is a timely reminder that there is no shortage of crucial projects that we could be getting on with to ensure that living standards are preserved over the years ahead,” Garrett said.

“While engineering construction had a glum 2019, the same cannot be said about commercial building activity which hit a new record high last year. Residential building finished 8.1 per cent lower during 2019.

“The newly released set of Master Builders Australia forecasts to 2024/25 envisage that a recovery in new home building activity is not too far off and that new dwelling starts will again top 200,000 by the middle of the decade.”

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