Australian Construction Outlook – Non-Residential Building

Non-residential building went through a substantial boom in the value of work commenced from 2015/16 through to early 2020. The coinciding commencement of a large number of projects influenced the rise in work done, which saw total work done reach an all-time record high in 2018/19.

This boom has now come to an end. We expect a substantial contraction over the next two years, due to the impact of Coronavirus (COVID-19) on the construction sector. A sharp downturn was already expected to follow this boom, as a result of the completion of substantial new space, combined with an economy that was already showing signs of slowing, and weakening government revenues resulting from the residential property downturn. COVID-19 has brought forward this downturn by 6 to 12 months (depending on the sector and state), on our forecasts, and made it a much larger overall decline. We are forecasting total commencements to fall 17%, in real terms, in 2020/21, prior to a recovery in 2021/22.