It has been an eventful couple of weeks in economic news Down Under. First, the Australian Industry Group issued a report that claimed the construction industry is still in a state of contraction. Fortunately for Telum, and contract labour providers in general, there were a number of positives to take out of the forecast for civil construction.
Nevertheless, the global economic situation is undeniably precarious. Back in May, Ford announced that it would cease its Australian operations in 2016 citing high manufacturing costs. The carmaker’s inability to compete with Asian and European costs will result in 1200 local job losses.
The announcement was followed by the first of a number of recent declines in the value of the Australian dollar. Not long after the announcement, the dollar dipped to 96.50 US cents, a one-year low at the time. And things only got worse. After the US released stronger-than-expected economic data at the end of May, the Aussie dollar plunged to its lowest levels since 2011.
Today the dollar is sitting at a comparatively dismal 93 US cents, prompting a bunch of alarmist commentary about the implications for the Australian economy. Gerry Harvey was characteristically vocal, claiming that prices on consumer electronics will increase as a consequence of the shift in the dollar’s fortunes.
So, where does civil construction stand in all of this? So far so good, it would appear.
Despite the doom and gloom coming from the likes of Gerry Harvey, the short-to-medium term outlook for civil construction and contract labour does not look too bad. At least, not in New South Wales.
The New South Wales State Government’s recent budget earmarked $6.4 billion over the next four years for Sydney’s ‘big six’ infrastructure projects. The unprecedented levels of construction will create more than 5000 direct jobs per year over the four-year term, with significantly more indirect jobs being created each year. With spending on infrastructure set to increase by 32% on last year, things are looking good for a substantial increase in demand for contract labour. Candidates looking for labour jobs over the next four years will be encouraged by the projects included within the NSW budget.
- AU$4bn for construction of the 36km North West Rail Link, with the first tunnel boring machines due in the ground next year;
- AU$782m for the 11.4km South West Rail Link between Glenfield and Leppington, due for completion in 2016 but currently running six months ahead of schedule;
- AU$423m for a 12km light rail line;
- AU$885m for the Northern Sydney Freight Corridor;
- AU$224m for Wynyard Walk, a pedestrian link under the city to link up to 20,000 public transport commuters an hour with Barangaroo; and,
- AU$76m million for the Inner West Light Rail Extension, a 5.6km, due to open next year.