Overview
The Australian Building and Construction performs over U$162 billion worth of building and construction work each year and accounts for around 10% of GDP, the fifth-largest sector within the economy (Master Builders Australia).
In February 2021, Infrastructure Australia (IA) released its infrastructure priority list, which . The list can be found at www.infrastructureaustralia.gov.au. IA has responsibility to strategically audit Australia’s nationally significant infrastructure and develop 15-year rolling plans that specify national and state level priorities.
In August 2019, IA published its audit covering transport, energy, water, telecommunications, and social infrastructure. The main challenges identified at the time included:
- Population growth which has placed increased pressure on ageing assets, rising road congestion, crowding on public transport and greater demands on social and infrastructure such as health, education, and green space.
- A large rise in network costs driving energy bills 35% higher over the past decade.
- The rollout of The National Broadband Network.
- Water security particularly in regional areas due to long-term drought.
- Crises since 2020 include drought and flood events, bushfires, and COVID-19.
In response to the challenges identified, Australia’s high-priority infrastructure projects broadly fall within the following five areas: town and city water security; national water security; coastal inundation protection; national waste and recycling management; and national road maintenance.
In effort to strengthen Australia’s ~U$90 billion infrastructure pipeline, the 2023-24 Federal Budget includes a strong agenda for urban Australia focusing on building better cities and suburbs. The current Government will develop a comprehensive National Urban Policy to address urgent challenges facing Australia’s major cities ranging from equitable access to jobs, homes and services to climate impacts and decarbonization. This policy will be matched with two new programs: Thriving Suburbs (budget U$140 million), and Urban Precincts and Partnerships (budget ~U$90 million).
Australia has several home-grown EPC (engineering, procurement, construction) groups, which are particularly well-established in the mining-related engineering construction sector, but some of whom also have considerable overseas project experience. Major UK and U.S. EPC companies that have long had a presence in the market include; Bechtel, Fluor, Balfour & Beatty, Laing O’Rourke (UK), Bouygues (France), POSCO (Korea). An example of entering the market through acquisition is ACS (Spain) by owning the CIMIC Group (formerly known as Leighton Holdings and includes CPB Contractors, Leighton Asia, Sedgman, Thiess, Ventia, and UGL).
American companies offering engineering, consulting, or technology solutions that could fit into any of Australia’s priority areas are encouraged to contact the U.S. Commercial Service for assistance. While some foreign engineering companies have entered the market through acquisitions, there are also opportunities to collaborate and partner with local firms on specific projects. The U.S. Commercial Service has been engaging with both American and Australian engineering firms and is in a good position to offer introductions to potential partners in Australia, especially for those partners looking to address infrastructure capability gaps.
Leading Sub-Sectors
Key sub-sectors in this industry include road and rail construction and commercial construction.
Opportunities
The Infrastructure Priority List (IPL) is a prioritized list of nationally significant investments, detailing major proposals to boost the Australian economy. The 2022 list identifies a record 165 major infrastructure proposals broken down into Priority Projects, High Priority Initiatives, and Priority Initiatives. The full IPL list can be viewed here.
Information on major construction projects in Australia is available through Projectory, a subscription-based service which covers the resource-related, infrastructure, defense, petrochemical, and utilities sectors.