Electricity, gas, water and waste services (EGWW) sector cost inflation has slowed from the very high rates of the immediate post-COVID period.
Annual EGWW cost inflation in Australia, according to our estimates, surged during calendar 2022, driven by robust construction activity, capacity constraints, high commodity prices, material shortages, escalating shipping costs, and labour shortages due to employment growth and low immigration. However, a moderation in annual EGWW cost inflation was observed over the year to June 2023.
We expect EGWW costs to return to a more normal level of inflation over the year to June 2024. This slowdown in cost inflation is influenced by the decline in commodity prices, improved supply chains, and weakened demand in the building and the general economy.
An extraordinary upswing in Electricity, gas, water and waste services (EGWW) construction is currently underway. This is the third boom in a ten year period. EGWW construction entered its third boom in 2021/22. This growth cycle is expected to last for three more years, reaching a peak in June 2026, before another downturn.