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Market |
Construction |
Report Type |
Market Research |
Country |
Australia |
Published |
10 November 2009 |
Number of Pages |
75 |
Download |
|
Immediate |
|
Publisher |
Business Monitor International |
This quarter BMI has introduced a new data series for infrastructure and its subsectors (transport and energy & utilities). This is an effort to address a significant deficiency in the availability of globally comparable, infrastructure-specific indicators and forecasts across a wide range of countries. The new infrastructure data series enables users to quantify trends and growth patterns in the infrastructure sectors of the 35 main emerging and developed markets out of the 62 countries in BMI's infrastructure service.
Industry Forecasts Kevin Rudd's government in May 2009 unveiled its second budget, the centrepiece of which was another multi-billion-dollar provision for infrastructure projects. The budget allocated AUD22bn (US$16.5bn) for economic (transport and energy) and social (education and healthcare) infrastructure projects in 2009- 2010. Combined, the government has pledged more than US$45bn for infrastructure for 2009-2011. Yet, despite the high level of public investment in infrastructure, the private sector has proved weaker than we had earlier estimated. As a result, we have revised our estimates and forecasts to a moderately more bearish scenario this quarter. We now estimate that real growth in Australia’s construction industry will register a contraction of 2.9% in 2009, compared with our previous forecast (made last quarter) of -0.8. In 2010, we now believe that the sector will undergo a contraction of 2.1%, compared with our earlier forecast for real growth of 0.3%. We then expect a recovery in 2011, to a real rate of sector growth of 1.6%, before a gradual acceleration in the rate of growth across the remainder of our forecast period, to a rate of 5.5% in 2014. However, given the downside revision to our core forecasts this quarter, the overall balance of risks to our forecasts is now to the upside.
Project Finance And Business Environment Ratings
In the Project Finance Ratings, Australia scores very well, as it has a strong precedent for successfully executing PPP projects. The country's overall score is 73.4, leaving it slightly behind Hong Kong, but ahead of Singapore. Overall, Australia sits in second place in our regional rankings (a total of 14 countries are included in our index). The country performs well for both key categories – ‘design and construction’ and ‘commissioning and operating.’ However, in light of the trouble experienced with the Lane Cove Tunnel, downside risks apply, especially for the outputs sub-score, which includes indicators such as demand and price risk. Australia also scores well for our wider infrastructure Business Environment Ratings. The country sits in third place regionally, behind China and Japan, but ahead of Singapore, South Korea and India. As a stable, developed market, Australia scores particularly strongly for Country Risk and Market Risks.
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