Non-residential building activity has been booming across Australia in recent years, driven in particular by the office, education, warehouse, and short-term accommodation sectors. Looking ahead, however, we expect things to start moving downhill, with a substantial contraction forecast for the next four years.
While a downturn was anticipated prior to the outbreak of COVID-19, the pandemic has had its influence on the outlook by exacerbating weaknesses in some areas, but also by inspiring governments to fast-track approvals and spend more on building works themselves. This means that while private sector work done is forecast to decline in the near term, it will be offset to some extent by a temporary boost in public sector funded works.
All said, the sectors responsible for much of the downturn over the next few years will be the same sectors that led during the boom. This includes activity associated with education buildings, but the decline in this sector is not expected to really begin until the 2022/23 financial year. Meanwhile, the major growth sectors helping to support activity in the short term are health, transport, and non-residential buildings not elsewhere classified (e.g., prisons, military bases, etc.).