Utilities construction activity in Australia has undergone three distinct growth cycles in the last decade. The first was a long-term growth cycle between 2005/06 and 2012/13 stemming from major renewal and upgrading of water infrastructure in response to prolonged drought and a resources boom that stimulated construction of gas pipelines.
The second followed in 2016/17 and 2017/18, driven by the ramping-up of work on the National Broadband Network (NBN) and the approach of the 2020 Renewable Energy Target (RET) year, which encouraged a surge in wind and solar farms across Australia.
We are now on the cusp of a third expansion forecast for 2021/22 and 2022/23, where we expect work done to peak at $34 billion (in constant 2018/19 prices). This outlook is supported by these key influences; the next wave of renewable energy investment, driven by the acceleration in large-scale battery storage and a continued process of decarbonisation in the electricity market, additional spending on the NBN, and a new phase of gas pipeline construction aimed at increasing sources of gas supply.
Following this next wave of construction, we forecast a downturn from 2023/24 onwards.