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Boom time ahead for the WA and QLD construction industry

February 21, 2020

It’s full steam ahead for Western Australia and Queensland for the next three years, with major road and rail projects set to deliver a boom.

A new report by Bis Oxford Economics says WA will experience the strongest growth in the engineering construction sector over the next three years, and by 2022 the value of its projects will reach more than $30 billion, overtaking both Victoria and NSW.

This year WA will experience a 14.2% predicted growth, followed by another 30% jump in 2021 and 2022.

QLD will undergo a small drop this year before it too experiences a huge rise – almost 20% in 2021, followed by a 15% increase in 2022.

The best news of all is the vast majority of projects in both states employ AWU members. The QLD branch in particular fought hard for a fantastic agreement for its workers, with construction workers earning at least $220,000 a year, and tunnellers earning at least $250,000 a year.

Adrian Hart, of Biz Oxford Economics, has told the AWU that much of the growth is coming from mining and heavy industry construction – particularly renewed investment in minerals projects in iron ore, but also base metals, and oil and gas.

“We have already seen a significant increase in the value of commencements in the mining and heavy industry construction segment for WA in the ABS data, and this should flow through to work done.”

The report highlights the WA Metronet project and rail construction projects for Fortescue Metal Group, with BHP and Rio Tinto in the Pilbara as being the major drivers of the boom in WA.

Mr Hart added: “For QLD, growth is coming through from transport (e.g. Cross River Rail, Brisbane Metro, Bruce Highway, Pacific Motorway) and mining projects across gas, coal and other minerals.”

For NSW and VIC the forecast is pretty stable, with NSW set to experience between 3-7% growth over the next three years whilst VIC will see a drop of around 4% this year. The recent bushfires will also create opportunity due to the significant damage suffered by both rail and roads across the country.

The national picture shows a rise of total engineering construction work rising from $88.5 billion in 2019 to $114 billion by 2022 as a result of the predicted boom for WA and QLD.

“The construction industry has played a major role in boosting wages growth across the country. The demand for highly skilled AWU construction workers will be peaking in a few years. This should provide a great opportunity for our members and other AWU industries, said Daniel Walton, National Secretary of the Australian Workers’ Union.

Mr Walton added: “We will of course ensure that our delegates are out there representing the best interests of our members so that everyone reaps the full benefits of this boom. It looks likely with all this growth, we will need more delegates and health and safety representatives to step up and ensure our workmates are properly looked after.”

The report did raise one note of caution and noted the biggest risk to the pipeline of projects would be the ability of the states to manage multiple megaprojects simultaneously.

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