Queensland major projects to continue decline, says report

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Major project activity in Queensland is forecast to decline by nearly 50 per cent over the next three years before posting a modest recovery, according to the 2014 Major Projects Report Update — a mid-term snapshot on the outlook for the state’s engineering construction projects valued at over $100 million.

Queensland major projects to continue decline, says report
Queensland construction work is set to decline further.

Prepared by the Queensland Major Contractors Association (QMCA) and Construction Skills Queensland (CSQ), the report forecasts that the value of construction work carried out on these projects in the shorter term will decline from $14 billion in 2013/14 to $8.8 billion by 2015/16. This represents a decline of 37 percent or $5.2 billion and a halving of work from the 2013/14 peak.

The report cites contributing factors as tight government finances at both State and Federal levels, low commodity prices (particularly coal prices) and a strong dollar.

QMCA and CSQ have revised their major project outlook down slightly across the forecast horizon to 2017/18, delaying the commencement of a number of projects in the water (Lower Fitzroy River Projects), rail (the unfunded Gold Cost Light Rail Stage 2) and mining (Foxleigh Plains Project/Gold Cost Quarry) sectors.

However, they say that offsetting these projects is an earlier than previously anticipated start to the Toowoomba Bypass as well as a pull forward of the Coomera to Helensvale: 2nd Track rail project, which both stem from announcements in the 2014/15 Queensland State Budget.

"There is no doubt that while conditions will remain tough, Queensland still has many positives on the major projects front," QMCA President Tony Hackett says. "There is much more [that] Government and the construction industry can do to tackle core issues such as high costs, low competitiveness, sustainable tendering processes, certainty of procurement timetables, asset sales and capital recycling programs, workplace efficiencies, skills development and innovation.

"In light of the ongoing contractions identified in the report update, the QMCA believes that the engagement of all stakeholders and a strong commitment to reverse the current trends is required," Hackett says. "The complexity of the issues involved may mean that there is no quick fix but decisive steps are urgently needed to address the significant decline in the value of major project works."


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