Construction across NSW has been on the up and up for a while now, with Sydney and Newcastle experiencing construction booms, particularly in the construction of new infrastructure. But will the boom continue? With the banking royal commission and changes to lending, not to mention a very shaky government, how is this likely to impact the construction industry in 2019?
We’ve done some research and summarised a construction forecast on what the construction industry holds for us this year.
Residential Construction across NSW
We are seeing mixed results when it comes to residential construction in 2019. CoreLogic reports that the construction boom is set to continue, particularly in Sydney with $4.8 billion projects currently under construction and $3.1 billion approvals still yet to get underway. However, Douglas Driscoll of Starr Partners notes that there are several factors that may impact the property market and in turn have an effect on the residential construction industry.
These factors include an upcoming election, changes to lending, interest rates and bank valuations.
Everyone seems to adopt a wait-and-see approach when it comes to property and a looming election. This information combined with a report from the Australian Construction Industry Forum (ACIF) indicates that the residential construction market is likely to decline in 2019 after a near record boom seen in 2017/2018.
However, it’s not all doom and gloom, with infrastructure and the non-residential building still increasing, the construction industry is still set to grow in NSW, particularly Sydney, over the next three years.
Commercial Construction across NSW
While the residential construction outlook looks like it’s easing, the same can’t be said for the commercial construction industry. Industry forecaster BIS Oxford Economics tipped the 2018/2019 financial year to be a ‘bumper year’ for the commercial construction industry… Largely driven by activity in NSW.
Construction of office buildings in Sydney has lead the charge in 2018 and this is likely to continue well into 2019 as demand for office space within Sydney remains strong.
New Infrastructure across NSW
New infrastructure projects across NSW is also tipped to keep the construction industry moving with billions of dollars being poured into new projects across the state, particularly in Sydney and neighbouring regions including Newcastle.
The state government has given the green light on many infrastructure projects in Sydney including a new Sydney light rail and the new $12.5 billion Sydney metro which are both currently under construction.
Newcastle is also receiving their own light rail network which is due to be open and operational by early 2019.
Along with many urban renewal projects such as the Lake Macquarie Fair/Mount Hutton Plaza redevelopment and redevelopment of the ‘The Store’ site in Newcastle, the Newcastle region will continue to be a hive of construction activity well into 2019.
Not to be outdone by its northern neighbours, Wollongong council has created an $800 million infrastructure to-do list to help ease congestion and create a cleaner and greener city. This will see construction continue in the region well into 2020.
The Wollongong Council plans to inject money into roads, footpaths, cycleways, pools, urban greening and storm water upgrades. West Dapto, in particular, is set to be a big winner with a large portion of the funds allocated to upgrading the area.
So while it may be a wait and see approach in regard to residential construction, commercial and infrastructure projects will keep the construction industry busy throughout 2019.
And for Hire Rite Temporary Fence, this means business as usual. We hold enough stock in all of our four locations to secure any size construction site and we look forward to being involved in some bumper construction projects throughout 2019.
What do you think 2019 will hold for the construction industry? Get in touch and let us know what construction projects you have planned for the year ahead.
Hire Rite Temporary Fence – Newcastle: (02) 4956 9060 | Central Coast: (02) 4311 9133 | Sydney: (02) 8332 1640 | Wollongong: (02) 4225 0176