RSS Feed

Creation Date: Wed, 09 Mar 2011 GMT

Engineering construction spend doubles in a decade

ENGINEERING construction activity is more than double the level of a decade ago, research to be released today shows.
The Bureau of Infrastructure, Transport and Regional Economics has found that in 2009-10, spending on infrastructure was $58.3bn, compared with $24.9bn a decade earlier.

The spending is underpinned partly by government outlays from the economic rescue package unveiled during the global financial crisis, suggesting that the increase may not continue at the same pace in the future.

About 49 per cent of the engineering construction work is on projects owned by the public sector, rising to 62 per cent when spending on energy projects is stripped out.

The finding is significant for companies such as Leighton Holdings, Downer EDI, United Group and Worley Parsons, which are leveraged to the level of spending on roads, rail, power stations and water assets.

Infrastructure Minister Anthony Albanese, who will release the report today, said the figures showed there had been a turnaround after years of neglect on infrastructure spending.

Critics say the short-term spending came at the expense of having more public funds available for strategic spending on measures to boost the productive capacity of the economy.

Spending on ports and harbours is up 315 per cent from 2006-07, while spending on water is up 207 per cent.

Annabel Hepworth, 'The Australian', 9 March 2011.