Sparse outlook for construction starts
The short-term forecast for Australia's construction sector from February to April shows $16.8 billion in total construction starts, a rise of 1 per cent on the preceding three months, BCI said.
November to January's figure was $16.7 billion. But the long-term trend suggests construction starts will fall by 2 per cent compared with a year earlier.
"Whilst there are individual pockets of strength, they are the cause of large-scale individual projects commencing rather than any strong overall market trend," the forecaster said. The figures sum up the state of building construction in Australia, "minuscule or no growth in both the three-month and 12-month trends".
BCI Media Group chief operating officer Damian Eastman said with the prospect of nine months of electioneering, sentiment was unlikely to change in the immediate future.
The short-term forecast for Victoria was for $3.1 billion in construction starts, down 19 per cent from the $3.9 billion in the previous three months (November to January).
The long-term trend shows total construction starts in Victoria are down 8 per cent year-on-year. But while the education sector was slowing, commercial projects were on the increase, up long-term by 21 per cent year-on-year.
Nationally, civil construction activity was still strong, BCI said, but there were signs of decline.
This year, both activity and starts were likely to peak and would begin to fall off by the end of the year, the group said.
According to the Australian Bureau of Statistics, the seasonally adjusted estimate of total building work done fell 2.6 per cent to $19.2 billion nationally in the September quarter last year after rising 0.2 per cent from the previous quarter.
The trend estimate of the value of non-residential building work done fell 1 per cent.
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BCI Economics forecasts total construction starts of $16.8 billion for February to April, a 1% rise on the preceding three months (November–January was $16.7 billion). However, the forecaster also says the long‑term trend points to a 2% fall in starts year‑on‑year.
BCI says activity is 'sparse and inconsistent' because growth is being driven by a few large individual projects rather than a broad market upswing, resulting in minuscule or no growth in both the three‑month and 12‑month trends.
BCI Media Group COO Damian Eastman warns that with the prospect of nine months of electioneering, market sentiment is unlikely to change in the immediate future, which could weigh on confidence around construction starts and project decisions.
Victoria’s short‑term forecast is $3.1 billion in construction starts (down 19% from $3.9 billion in the previous three months). The long‑term trend shows total starts in Victoria are down 8% year‑on‑year; education projects are slowing while commercial work is up about 21% year‑on‑year.
Nationally, civil construction activity is still described as strong by BCI, but the report also notes early signs of decline and predicts that both activity and starts will likely peak this year and begin to fall off by the end of the year.
The ABS seasonally adjusted estimate shows total building work done fell 2.6% to $19.2 billion nationally in the September quarter last year after a 0.2% rise from the previous quarter. The trend estimate for non‑residential building work done fell 1%.
The report suggests investors should be aware that broad construction growth is limited and pockets of strength are project‑specific. That means company exposure to large individual projects, state‑level differences (for example, weaker Victoria overall but stronger commercial work) and early signs of a national peak could be important factors when assessing construction and supplier stocks.
The article notes the education sector is slowing while commercial projects in Victoria are up long‑term (about 21% year‑on‑year), and civil construction remains relatively strong nationally though showing signs of softening. For investors, that divergence highlights the importance of checking sector and regional exposure rather than relying on a single national headline.
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