NSW economy to benefit from civil construction boost: BIS Shrapnel
17 September 2013
The New South Wales (NSW) economy will grow over the next three years on the back of rising construction activity, including a raft of large public infrastructure projects, according to a report by economic forecaster BIS Shrapnel.
The value of non-resources civil construction will total A$85 billion between 2012 and 2017, making it a main driver of the state’s stepped-up activity, says Adrian Hart, Senior Manager for BIS Shrapnel’s Infrastructure and Mining Unit.
“While affected by declining resources investment in the Hunter Valley, the state’s civil construction market is projected to receive a large boost from new infrastructure projects through the next four years, spearheaded by the A$9 billion North West Rail Link, A$1.6 billion Sydney Light Rail, several Pacific Highway upgrades and the A$10 billion+ WestConnex road project,” Mr Hart says.
Increased activity in mining, finance and insurance, professional services and health services will contribute to the NSW economy, which is Australia’s largest economic jurisdiction but has underperformed the rest of the nation for a decade.
However, BIS Shrapnel predicts construction will be the main driver across the NSW economy and expects the stronger performance to be sustained over the next four years thanks to construction’s multiplier effect – its reach across other areas of the economy.
“The construction industry is important because it is a large employer of local labour and feeds many other industry sectors, particularly manufacturing and professional services, during the design, construction and fit-out stage of major projects,” Mr Hart says.
“Every dollar that is invested in construction returns 3 to 4 dollars to the rest of the economy,” he adds.
NSW Gross State Product (GSP) growth edged up to 2.9 per cent in 2012-13, up from 2.4 per cent a year earlier. The state’s economic expansion is forecast to accelerate further to 3 per cent in 2013-14 and more than 3.5 per cent in both 2014-15 and 2015-16, BIS Shrapnel said in its report, State Economic & Industry Prospects: NSW 2013 – 2023.