Activity in the commercial construction sector is set to reach a decade high which is great news for the HVAC industry.
The latest Building & Construction Industry Forecasts produced by Master Builders Australia show that total commercial construction activity is expected to contribute $42 billion to the economy in 2017-18.
The organisation's national manager for economics, Matthew Pollock, announced forecast growth of more than 14.5 per cent which is equal to $5.3 billion.
Pollock said commercial building activity will be strong enough on its own to drag the whole industry back into positive territory for the first time in four years.
“With a small moderation expected in the value of residential construction work and another year of consolidation in the engineering sector, the timing of this surge in commercial construction couldn’t be better,” he said.
“Better yet, new commercial construction projects will provide job opportunities for workers who may be finishing up on major high density residential projects over the next 12 months or so.
“New retail related construction is expected to rise to $6.9 billion in 2017-18, led by the recent introduction of some big international retailers, including Amazon which recently built a large distribution centre in Melbourne’s Dandenong South and plans by Aldi to open another 30 stores across the country in the next 12 months.”
On the residential building front, Pollock said the last three years saw unprecedented growth in new housing construction.
“We have built more than 200,000 new dwellings per year – a feat unmatched in our history,” he said.
“Despite the forecast showing a moderation in new dwelling construction, we expect new commencements in 2017-18 to top 195,000 and average around 185,000 thereafter. To keep pace with population growth we will need to build at least 185,000 new dwellings each year for the next five years.”
Adding to the good news is a forecast boom in renovations which will average $8.8 billion per year and top $44 billion over the next five years.
These figures were supported by the CoreLogic Construction Monthly report which confirmed 1,719 development applications and proposals were added to the construction pipeline across Australia in January.
CoreLogic commercial research analyst Eliza Owen said Australia saw $4.2 billion worth of projects commence in January.