Business, Earthmoving News

Strong construction growth forecast for coming year

Master Builders Australia says more work is needed if 1.2 million homes will be built in the next five years but civil construction is going strong

Master Builders Australia has released its 2024 building and construction industry forecasts, where it predicts that between July 1, 2024 until June 30, 2029 there will be 1,087,325 new home starts – 110,000 homes short of the federal government’s National Housing Accord target.

However, says CEO Denita Wawn, Master Builders Australia expects there to be a fall in interest rates in the near future that will lead to a more favourable investment market.

“The federal government has also announced a number of significant housing measures that focus on increasing supply in social and affordable housing and the rental market,” Wawn says.

“However, constraints on the supply side like workforce shortages, industrial relations changes and a poor planning system counter the full effectiveness of these measures.

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“Productivity in the industry has fallen 18 per cent over the last decade. It’s clear that governments need to expedite the rollout of planning reforms to reduce the high costs and time it takes to build.

“Concerningly, the full impact of the Closing Loopholes Bills and union pattern bargaining negotiations underway in several states has not been factored into these forecasts.

“Workforce shortages continue to be the biggest challenge for the industry across all sectors.”

Master Builders Australia anticipates that non-residential building activity will peak around $62 billion during 2024–25, before dropping to $54.8 billion in 2028–29. Civil construction is expected to grow until the second half of the decade. During 2023-24, the volume of civil construction activity is projected to expand by 5.3 per cent and reach $118.4 billion, while construction work related to utilities is anticipated to see the largest gain (+9.7 per cent) over the course of the year.

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