A recently published report by Deloitte has forecast infrastructure spending to peak at almost $40 billion in 2019.
Since a trough in 2015, there has been a notable increase in the value of infrastructure projects listed in the Investment Monitor database.
This growth is expected to be driven by a number of large New South Wales projects, including the $8.3 billion Sydney Metro Northwest, the $4.9 billion Pacific Highway upgrade from Woolgoola to Ballina, the $3 billion NorthConnex and the $2.1 billion Sydney CBD light rail.
“Although the healthy project pipeline will continue to support elevated levels of infrastructure activity, we expect calendar year 2019 to be the peak for this cycle,” Deloitte Access Economic partner and report lead author Stephen Smith said.
“The factors that have supported the current surge in infrastructure spending are beginning to wane. There are fewer assets left to privatise, and the slowing housing market is weighing on property tax collections. That said, the NSW state election, scheduled for March, creates the prospect of additional projects entering the database.”
Deloitte’s other report – ‘Tracking the Trends 2019’ – explores the key trends facing extractive companies in the fourth industrial revolution.
The report predicts that the extractive industry is poised for greater growth than it has seen in the last decade, but cautions that the industry’s challenges are many and diverse.
“Disruption and volatility has become the new normal. The pace of change is challenging the industry’s ability to adapt,” Deloitte’s national mining leader Ian Sander said.
“Australian mining companies must not only adapt to the disruption of industry from a technical viewpoint, but the disruption being brought about by changing community standards and attitudes towards mining,” he said.
Deloitte warns that the Banking Royal Commission has brought extra public scrutiny to large corporations – a trend the mining industry isn’t immune from. With a looming federal election, the report warns that extractive companies are poised for further challenges.
“In this new world order, miners will not attract talent, investment or community support if they only focus on communicating the discrete value they currently bring to communities,” Sanders said.
“Miners need to go a step further by developing differentiated business models designed to drive long-term value for their organisations and for the Australian community.”