Infrastructure Australia (IA) has released its second annual market capacity report, warning that insolvencies in the construction sector have increased at a faster pace than in other sectors since the COVID-19 pandemic.
IA says the sector will struggle to complete some 5500 construction projects worth $647 billion over the next five years, with the situation being compounded by some high-profile collapses in the sector in recent times.
Acting CEO Adam Copp notes that many construction firms are already operating at 90% of their capacity or more.
From The AFR:
“It is no longer a question of if a project will slip, but more likely when, by how long and at what cost,” Infrastructure Australia said in its second annual market capacity report.
A surge in insolvencies, combined with shortages of labour and building materials and poor productivity, has created “unprecedented uncertainty” in the industry, IA said…
Engineers Australia boss and former IA CEO Romilly Madew said the report reflected the need for change in an industry that was “at breaking point”…
The 5500 construction projects that make up Australia’s $647 billion pipeline include residential building, privately funded toll roads and $237 billion of public infrastructure, mostly transport systems such as metros and motorways.
This worrying because Australia is facing reduced infrastructure capacity at the same time as nearly one million net migrants are projected to land in Australia over the next four years – a figure that is highly conservative:
The inevitable result will be increased housing shortages, infrastructure bottlenecks and crush-loading across the board – basically a carbon copy of last decade’s experience.
It is a recipe for degrading living standards.
