Adbri chief executive Nick Miller has expressed mixed emotions about future construction activity, despite additional funding in the Federal Budget and optimistic appraisals about the economy.
Considering these factors, Miller declined to provide any updated guidance at Adbri’s presentation to the Macquarie Australia conference in early May.
Miller said incentives such as the HomeBuilder program and a significant infrastructure pipeline were very positive, but not enough to provide certainty against the impacts of COVID-19.
“The Federal Budget has significantly bolstered the country’s infrastructure pipeline with an additional $15.2 billion earmarked for nation building projects,” Miller said.
“We believe the construction industry has the ability to deliver a ‘stronger for longer’ cycle and the infrastructure pipeline unveiled in the Budget can help underpin that outcome.”
But a shift in the construction sector is underway, if Miller’s assumptions are to be believed.
As the option to work from home and keep away from the city becomes more commonplace, a boost to residential and regional infrastructure may occur.
The Australian Performance of Construction Index (PCI) for April, conducted by the Australian Industry Group (AiG) and the Housing Industry Association (HIA), showed just that.
The PCI indicated that commercial (51.4 points) and apartment (54.6) construction were the lowest of the four segments, with housing and engineering both with scores over 60 (where scores over 50 indicates growth)
The continued impact of the HomeBuilder grant would only accentuate Miller’s theory.
Miller said what is most important is the ability for the $15 billion infrastructure pipeline to be upheld, with jobs and economic growth on the line.
“The Government looks to have the right mix of projects in terms of scale and geographic balance. In particular, it’s pleasing to see funding for smaller and medium size infrastructure projects which will help ensure shovels are in the ground faster, supporting economic activity and job creation,” Miller said.
This was a sentiment echoed by the managing director of the Project Management Institute for Asia Pacific Ben Breen.
“It’s critical that the Commonwealth works with the states to ensure these projects get rolled out and completed in time and within budget. When projects run over budget or exceed their timeline it erodes public trust in the state and federal governments,” Breen said.