We have revised our forecasts again this quarter – but this time only slightly – after a heavier revision on the back of a supplementary budget last quarter. We now anticipate that real output in Australia’s construction sector will contract by only 0.8% in 2009, compared with our previous forecast of a contraction of 1.2%. Before the supplementary budget, we had predicted that the sector would contract by 3.2% this year. In 2010, we believe that the sector will undergo real growth of 0.2%, before accelerating to 1.8% real growth in 2011. Upside and downside risks to our forecasts remain in place, although upside risks predominate, particularly in 2010. Our core scenario envisages only a modest recovery of the global economy in 2010, and that if the recovery proves to be more pronounced then privately generated construction activity in Australia should be boosted accordingly. That upside risk remains in place, particularly since Australia’s economy appears to be weathering the global downturn better than many other countries .

Japan-based Mitsubishi Heavy Industries, one of the world's leading heavy machinery manufacturers, has signed a AUD4.3bn (US$3.4bn) agreement with Australia's ZeroGen Pty, a state-owned company, to study a project to build a cleaner-burning coal-fired power plant, reports Bloomberg (June 2009). Under the agreement, a feasibility study for a 530MW power station, whose commercial operation is scheduled for September 2015, will be conducted by Mitsubishi Heavy and Mitsubishi Corporation. On June 12 2009, BMI reported that Mitsubishi was in discussions to co-operate on the project, and the agreement was signed on June 22 2009. The plant is based on carbon-capture technology, which will reduce carbon dioxide emissions by 60-90%.