Spending on infrastructure in the private sector is set to increase, while tighter budgets will restrict investment in public projects, according to a new survey by AECOM.
The inaugural Infrastructure Construction Sentiment Survey by AECOM shows spending on infrastructure in the private sector will increase, while shrinking coffers will restrict investment in public projects.
More than 60 percent of participants in the private sector expect a rise of at least 10 percent over the next three years.
In contrast, only 20 percent of public authority respondents anticipate similar increases in funding for federal, state and local government projects. Most public authorities indicate they expect investment in communal infrastructure to contract over the same period.
AECOM polled 2500 industry participants in late June for the survey.
Privately funded rail, port and pipeline developments topped the list of infrastructure investments, with the focus shifting to transport-related requirements for large scale projects in resource-rich states such as Queensland and Western Australia.
Key results of the survey include:
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55 percent of contractors and consultants expect an increase in infrastructure work over the next three years
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48 percent of respondents classified their experiences working in public-private partnerships as poor
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83 percent of the delivery market sees risk allocation as the biggest challenge to a successful public-private partnership
"Although in recent weeks there have been announcements that significant mega resources projects are being deferred, there remains a significant infrastructure demand for on-going projects that typically do not feature in the headlines," says AECOM global business intelligence manager, Michael Skelton.
"Aggregate demand for resources will continue to drive private investment in civil infrastructure. Despite Australia's terms of trade declining from record levels, it remains historically high and projections over the coming years remain favourable to growth."
"This survey has brought industry issues and challenges to the forefront. If output prices of the resources sector are declining, then a thorough review of input prices - including construction costs of materials and labour - procurement strategies and operational efficiencies need to be addressed in order to maintain profitability."
View AECOM's report here
Source: AECOM/Davis Langdon
Source: AECOM/Davis Langdon
