Australia and New Zealand combined are projected to see 2.4% GDP growth in 2019:
Construction / EPC activity in Australia is marginally on the increase as we move into the remainder of 2019. The Australian EPC sector continues to feel the downturn effects of the ore and minerals needs of mainly China and the rest of the world.
Australia has a new Prime Minister Mr. Scott Morrison. Much of the future construction growth in Australia will be enhanced by the improving economy and increased government spending on public facilities, housing and infrastructure projects.
Among the developed OECD countries, Australia has struggled the most from discounted minerals and commodities prices. Australia has avoided an economic slowdown thanks (in some part) to decent growth in the private housing and commercial construction sectors. Skilled labor availability has picked up substantially. Salaries and hourly wage rates are forecast to remain stable or moderate slightly in 2019. Unemployment in the construction sector is expected to increase marginally in 2019 from 2018 levels. Low commodity mineral prices will continue to stymie the Australia economy and construction sector. Australian construction (L&M) inflation is forecast to be in the 2.1% to 2.5% range for the balance of 2019. Australia is seeing the start of a number of major highway, railroad, airports, port expansions, power and other infrastructure related projects, with a number of these projects mobilizing and going to the field in 2019.
Australia’s GDP is forecast to grow in the 2.2% to 2.5% range in 2019. Unemployment in 2019 is forecast to be in the 4.2% to 5.2% range. Inflation is projected to be in the 2.3% to 2.6% range for the remainder of 2019. It appears that the majority of the “mega” LNG projects are just about completed (Wheatstone, Pluto, Gorgon, Ichthys etc.), these projects employed tens of thousands of construction related workers. In the last six months, there have been some major Oil & Gas CAPEX projects given the “green light” to proceed.
New Zealand construction inflation is forecast to be in the 1.9% to 2.4% range in 2019. New Zealand’s GDP is forecast to grow in the 2.2% to 2.4% range in 2019, New Zealand unemployment in 2019 is forecast to be in the 2.6% to 3.4% range, and latest word is that the construction industry is expected to have an average year in 2019. The recent Christchurch mosque attacks is something that New Zealand has never experienced – look for increased spending on beefing up infrastructure / security related systems.