Market Monitor - Construction industry - Australia

Market Monitor

  • Australia
  • Construction

19th February 2015

Problems remain in the building sectors of most of the countries covered in this issue of the Market Monitor. Consequently, the outlook for the construction industry in 2015 remains muted.

Market performance at a glance

Australia

  • Residential construction performance is expected to improve in New South Wales and Queensland due to low interest rates, population growth and increasing building approvals.
  • Commercial construction is expected to be further affected by the reduction in mining investment and resource related work.
  • However this will be offset to some extent by increased growth in telecommunications infrastructure and transport infrastructure.
  • Payments in the construction sector take between 90-120 days on average. Notifications of non-payments have increased and the current level is high.
  • Construction insolvencies are expected to level off in 2015, but the overall level remains high.
  • Our underwriting approach remains cautious as the residential and commercial construction sectors struggle to fill the gap left after the mining-boom ended in Australia, and increased competition leads to margin erosion (especially for new and small businesses).

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