Economic and industry analyst BIS Shrapnel has forecast the current mining driven civil construction boom to end in 2015.
However, despite the short lifespan of the boom, it is expected to peak at around $125 billion, close to double that of 2010/11 levels, the company says.
According to its latest report Engineering Construction in Australia 2011/12-2025/26, BIS expects civil work to jump by more than a quarter this financial year – approximately $23 billion.
Speaking previously to Australian Mining, BIS Shrapnel senior manager for infrastructure and mining Adrian Hart said by 2014, the industry can expect to see it hit around $50 billion with growth rates of between 16% to 20% per year.
"It’s going to be a phenomenal increase."
He said that despite the mining cycle typically being a fairly rough one "the sheer demand from China and India means that we are likely to ride the top of the resources cycle for longer, but due to current infrastructure constraints we are actually struggling to keep up.
"Part of this was down to the Global Financial Crisis, which saw a lot of projects being delayed, but the outlook for the next three to four years will see double digit growth for infrastructure," Hart said.
Infrastructure construction struggled at the start of this decade as there was a slowness in growth tied to a lack of demand, especially after the ‘Asian tigers’ imploded, as well as a general downturn in Australia coupled with the tech bubble bursting which generally cut investor confidence.
However, Hart said that while the nation is now well placed overall, there are still some problems ahead.
He explained that while infrastructure in Western Australia can and is capitalising on the iron ore boom, issues on the east coast are still leading to inefficiencies on the logistics chain.
But the future does look brighter, as there are a number of infrastructure projects that are either working through or have already passed the approvals stage.
In the latest report he said “right now, it’s a monster resources battle between Queensland and Western Australia.
"Both states are expected to see civil construction activity surge around 40% in 2011/12 alone, led mainly by LNG and bulk commodities infrastructure. They will soon be joined by the Northern Territory and South Australia, with activity in those regions centred around the Ichthys LNG and Olympic Dam Expansion projects respectively."
Hart painted a grim picture for NSW and Victoria, stating that "while NSW does benefit from Hunter Valley coal projects, much of the growth recently has been driven by a strong upswing in public investment in water, railways, electricity, harbours and roads.
"Unfortunately, most of the projects here have been completed or are winding down. While the new NSW State Government is making headway in planning for new projects, state and federal governments generally are in cost-containment mode and will not likely provide a boost to civil work until 2014 or 2015," he added.
Regarding Victoria, Hart stated that its "strong growth over the past few years has been driven by key projects such as the Mortlake power station, Wonthaggi desalination plant, the Peninsula Link road project and a range of large rail investments including the first stages of the Regional Rail project.
"Again, as in New South Wales, many of these projects are either complete or will move to completion over the next few years, without equivalent large projects in the pipeline to take their place. Overall, BIS Shrapnel is forecasting Victorian civil work to decline around 20 per cent over the three years to 2013/14."
He linked this to the existing ‘two speed economy’.
The company estimated that mining related civil construction work will nearly double from $40 billion in 2010/11 to more close to $80 billion in both 2012/13 and 2013/14.
After this a decline is expected, with the mining boom right now masking the overall weakness of the construction sector.