Construction boom has come to an end

A slowdown in the mining industry means the boom in engineering and construction work is likely to end this year, new research shows.

According to economic researcher BIS Shrapnel engineering work is set to reach around $128 billion this financial year, but a dip in mining activity is expected to cut that figure by 5.4 per cent next year.

 

By 2016-17 BIS forecasts engineering construction to be 20 per cent below this year's peak, with activity not set to hit similar highs for at least another decade.

 

For mining in particular BIS estimated engineering construction would fall around 30 per cent from roughly $78 billion in 2012-13 to $56 billion by 2016-17.

 

BIS Shrapnel senior economist Adrian Hart told ABC News the construction market had grown rapidly over the last decade, and mining was responsible for its change in fortunes.

 

“Over 12 years the engineering construction market has grown from about $28 billion of work done per annum to this year where we believe it'll hit about $128 billion per annum,” he said.

 

“Really the mining sector has taken it right over the top. The decline in mining investment from here is the key reason why the overall engineering construction market is heading for decline.”

 

Hart said policy adjustments might be needed as the economy shifted away from the mining industry, and the transition might result in a period of weak growth for the nation.

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