New data from Rider Levett Bucknall shows that Australia’s infrastructure boom is exerting significant pressure on the price of materials and services.
The International Report on Construction Market Intelligence, released quarterly, reveals that the boom in Victoria’s government-backed infrastructure activity is directly influencing the prices of trades such as concrete, steel and piling/excavation.
RLB forecasts cost growth in Melbourne to increase at a rate of 4.0 per cent throughout 2019 and 2020. Darwin is the only Australian capital whose escalation is not expected to exceed inflation in 2020, with growth of just 1.2 per cent.
The residential sector’s slowdown, resulting from tightening lending conditions both at home and abroad, has not affected overall construction activity.
According to the report, strong growth in the construction and engineering sectors led to an increase in construction volume in Victoria and New South Wales.
“The volume of construction activity in NSW and Victoria grew during CY 2018, with strong growth recorded in both the building and engineering sectors. This activity growth is set to continue into 2020, at a more moderate pace,” said RLB Global Chairman, Stephen Mee.
“Melbourne’s market appears to be the most heated, with 86% of sectors in the peak zone, followed closely by Sydney with 71%.”
Sydney contractors are reportedly facing difficulties in “the tendered spread of trade prices, and the number of trade quotations received.”
Canberra’s market is also competitive, with competition in the structural and service trades.
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