Construction Forecast 2016/2017

Construction outlook

Every year BCI puts together a construction market report from their project leads information which forecasts where the industry is set to head over the following financial year broken down by state and project sector.

Below are just some of the findings from this years report.

RESIDENTIAL SECTOR

Since late 2013, residential construction, and particularly, apartment construction, has been the biggest performing sector. Melbourne and Sydney have lead the way, with a record number of dwellings approved and commencing during 2015/2016. The outlook for the 2016/17 financial year see a shift in construction starts, with predictions that the residential sector will come off the boil and hospitality and retail showing the best signs of growth going forward.

resi graph

HOSPITALITY SECTOR

With expectation that the depreciating Australian dollar would attract more tourists, there was an incentive to invest in hospitality facilities. These forecasts became reality with additional overseas visitors and a growth in Hospitality related construction commencements of 13%. It is expected that this momentum will carry through with a forecast 16% increase for 2016/2017.

Hospo graph

RETAIL SECTOR

Retail has had a bit of a topsy-turvy 12 months, with companies such as Aldi and Wesfarmers enjoying success and a number of high profile international retailers such as Cartier, Sephora, Omega and Valentino opening stores in Australia. On the other hand well known brands such as Masters and Dick Smiths have had a disappointing year with the later closing their stores in early May. Despite tough and uncertain conditions, Australian retail sales were 3.7% ahead of the same time last year.

To meet the challenge of building sales, store expansion and refurbishment have taken off with a 24.5% increase in Retail commencements in 2015/2016. This trend is expected to continue although at a slower pace with 2016/2016 commencements to climb a further 9%.

Retail graph

If you want to get a full run down on how each state and sector is set to perform this coming financial year, click here to purchase the Australian Construction Market Outlook Report.