Australia & New Zealand combined are projected to see 2.4% GDP growth in 2019:
Lackluster economic growth & restrained consumer spending / confidence is on the cards for the 2nd half of 2019. Construction / EPC activity in Australia is marginally on the increase as we move into the remainder of 2019. The Australian EPC sector continue to feel the downturn effects of the ore & minerals needs of mainly China, India & the rest of the world.
Australian’s disregarded pre-election voter polls, & gave a shock win to Australia’s new Prime Minister Mr. Scott Morrison. Much of the future construction growth in Australia will be enhanced by the improving economy & increased government spending on public facilities, housing & infrastructure projects.
Among the developed OECD countries, Australia has struggled the most from discounted minerals & commodities prices. Australia has avoided an economic slowdown thanks in some part to decent growth in the private housing & commercial construction sectors. Skilled labor availability has picked up substantially, salaries & hourly wage rates are forecast to remain stable or moderate slightly for the remainder of 2019.
Low commodity mineral prices will continue to stymie the Australia economy & 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 & other infrastructure related projects, with a number of these projects mobilizing & going to the field in 2nd half of 2019.
Australia’s GDP is forecast to grow in the 2.2% to 2.5% range for the 2nd half of 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 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 for the balance of 2019. New Zealand’s GDP is forecast to grow in the 2.2% to 2.5% range in 2019, New Zealand unemployment in 2019 is forecast to be in the 2.6% to 3.4% range. 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.