Electricity, Gas and Water: Cost & Activity Forecasts

In the electricity, gas and water (EGW) sector, the outlook is for subdued cost inflation over the next few years. The inflationary environment in the Australian economy is expected to remain weak for a few years. The outbreak of Coronavirus (COVID-19) and the restrictions put in place to slow its spread have caused big shifts in the labour market. Some of this weakness is forecast to flow through to lower cost growth in the coming quarters.

It is important to note that there is likely to be only a small and short-term impact from COVID-19 on the utilities construction sector, in comparison to other construction sectors. A large proportion of construction work is government funded and much of the rest is undertaken by private sector owned utilities businesses, which should not be greatly affected by weaker demand during the pandemic.