The number of commercial projects reported for the month of September dropped from August, however total project value increased 500%, largely attributed to Shell’s $2 billion floating liquefied natural gas refinery moving to construction. Utilising revolutionary technology, the new refinery is allowing Shell to access offshore gas fields that were previously too difficult or too costly to develop.
Australia’s construction pipeline remains strong with 1,926 new construction projects reported for September, and a the value of new commercial construction projects for September estimated to be $32bn, the highest monthly figure since July 2013. CoreLogic Commercial Research Analyst, James Shang comments: “We expect that this level of activity in the commercial development sector will put continued upwards pressure on the cost of construction, even though the residential market is softening and data from Australian Bureau of Statistics indicates the residential construction boom is moving through an historic peak”.
The civil engineering sector continues to dominate, accounting for nearly 78% of the total project pipeline value, thanks largely to Melbourne’s second metro tunnel with an estimated build cost of $23bn.
The number of Australian construction projects entering into the construction phase slipped 6% from August, with only two sectors registering an increase in the number of projects moving into construction. The industrial sector recorded the largest month-on-month increase of 12 projects and the mining sector experienced the largest fall of 43%. Shang comments: “Whilst the number of projects is trending down on a monthly, quarterly and annual basis, it’s important to note that from a value perspective, year-on-year projects shifting to construction phase have increased by 20% and month on-month results show a rise of 51%”.
For detailed industry and state-wide analysis including project specifics, the full report is available here.