Infrastructure

Overview

The Australian Government, together with its States and Territories, is keeping its infrastructure and construction industries going as a matter of economic priority. Whilst State and Territory Governments have the power to close constructions sites, construction continues to be classified as essential, meaning work can continue on building sites under the rules of COVID-19 social distancing.

Both the Victorian and NSW governments have recently announced that they are looking at bringing forward "shovel-ready" projects. Key developments include:

  • In NSW, the Premier announced on 28 April the first 24 projects to undergo a fast-tracked assessment process. The projects will potentially inject AU$7.54 billion into the state's economy.

  • The Victorian Government has set up a dedicated taskforce to help keep the state's building and development industry running through the coronavirus crisis, while announcing the approval of four new projects worth more than AU$1.5 billion.

  • The Western Australia government has also announced 11 road and bridge projects that will be accelerated by several months, including the Fremantle Traffic Bridge and the Bunbury Outer Ring Road. This includes speeding up the procurement process to stimulate the economy.

Despite the government allowing work on construction sites to continue, analysts (from Moody's Investors Service and the Australian Bureau of Statistics) expect the industry will decline further in 2020 (following a 2.9% drop in late 2019) on the back of COVID-19 disruptions and slowing economic growth.

While most large construction sites are still operating, COVID-19 is restricting mobility and causing a rise in supply chain costs, impacting cash flows. Contractors with fixed price contracts are exposed, as delays impact wage costs and rising input costs narrow margins. Some privately funded projects are being put on hold and it is expected that the private construction sector will soften in the next 12 months. Nonetheless, the essential infrastructure status will see the pipeline of Government infrastructure projects proceeding and the industry is expected to return to pre-COVID-19 levels by 2021.

Further reading

The State Government are fast-tracking infrastructure projects due to COVID-19:

Video insights

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Video
9:29
Last updated: 11 May 2020
COVID-19 Market Realities: Infrastructure in Australia, 7 May

The infrastructure sector is still full steam ahead with projects like Aerotropolis and Western Sydney Airport providing long-term opportunities.

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Advice and opportunities for exporters

We see significant future opportunities for New Zealand businesses in Australia (both locally and Australian-based) in both design services and construction within the following sectors:


SECTOR: Multiple

OPPORTUNITY: Rebuilding fire-damaged infrastructure

INVESTMENT AREAS: Roads, rail, electricity and telecommunications, buildings.


SECTOR: Water

OPPORTUNITY: Drought and waste

INVESTMENT AREAS: Rebuilt or new reservoirs, weirs and dams, pipelines and network fixes, and expanded desalination capacity in coastal cities. Investment in wastewater driven predominantly by population growth.


SECTOR: Energy

OPPORTUNITY: Emissions targets, closure of coal-fired generation capacity

INVESTMENT AREAS: Renewable generation and storage.


SECTOR: Waste

OPPORTUNITY: Changing consumer behaviour in recycling

INVESTMENT AREAS: Changes to both the quantity and quality of waste produced and how waste is managed e.g. waste to energy.


SECTOR: ICT

OPPORTUNITY: Better insights and more efficient operations

INVESTMENT AREAS: Big data and analytics are fundamentally changing the way builders, developers and professionals go about their jobs.


SECTOR: Social

OPPORTUNITY: Vulnerable persons + schools & health capacities

INVESTMENT AREAS: Public housing due to more vulnerable people out of work or struggling.

School and hospital capacity needing to increase due to population growth and lifestyles affecting health.


SECTOR: Climate change

OPPORTUNITY: Re-thinking our investment choices

INVESTMENT AREAS: More resilient and less carbon-intensive systems and assets, offering further economic and social benefits in transport, water, communications and buildings.


SECTOR: Transport

OPPORTUNITY: Population growth

INVESTMENT AREAS: Transport - in particular road and rail.


SECTOR: Labour

OPPORTUNITY: Skills shortage and increased construction costs

INVESTMENT AREAS: Some sectors such as rail, mining, energy and defence will experience risks of skills shortages and greater costs of construction materials and equipment.

NZTE provides a service for NZTE customers that curates project details across a range of sectors throughout Australia. If you are interested please get in touch with your Customer Manager to discuss whether this service is right for you.

Contact NZTE

We're available to talk to you about any issues your export business is facing due to COVID-19.

For existing NZTE customers, please contact your New Zealand-based Customer Manager.

If you're unsure who to contact or haven't worked with us before, you can call NZTE on 0800 555 888 or email below and one of our Customer Advisors will help you.