With the Australian Labor party securing a majority in government, GlobalData has noted that it continues to hold a positive view on the outlook for Australia’s construction industry this year. The leading data and analytics company expects the country to see record construction industry growth of 4.3% this year, and record a 3-year compound annual growth rate of 2.6% between 2023 and 2026.

Willis Rooney, Economist at GlobalData, comments: “While the Labor government’s investment in transport infrastructure has yet to be fully outlined, it is expected to maintain much of the significant investment seen in the sector in recent years.”

Labor has committed to provide $374.4 million to begin corridor acquisition and early works on a fast rail link between Sydney and Newcastle. The line is expected to be the first phase in a future potential high-speed rail line between Sydney and Brisbane. Labor has also signalled its intention to support Melbourne’s $36.7 billion Suburban Rail Loop development, committing $1.6 billion towards the $21.4 billion eastern section of the project.

Rooney continues: “Measures to tackle climate change played a prominent role in Labor’s election campaign. Central to Labor’s climate strategy is its ‘Powering Australia Plan’, which outlines a comprehensive reduction of emissions and expansion of renewable generation by 2030. Significant opportunities within Powering Australia for the construction industry include the $15 billion ‘Rewiring the Nation’ policy, which aims to accelerate the construction of high-voltage infrastructure to accommodate a significant planned increase in large-scale renewable energy.”

Labor’s election promises to support home ownership will further support activity in the residential construction sector, with pledges including a Help to Buy scheme and a considerable increase in the construction of social and affordable housing. A total of 30,000 new social and affordable housing properties will be constructed over the next five years, funded by investment returns from the $7.5 billion Housing Australia Future Fund.

Rooney concludes: “While a new Labor federal budget is not expected until October of this year, the election promises made during Labor’s campaign will provide significant opportunities for the Australian construction industry during their tenure. However, with the Australian economy at near full employment and construction activity expected to remain intense due to the smoothing of HomeBuilder-funded construction and the considerable pipeline of infrastructure works, rising wage costs, skill shortages and further inflation of construction material prices may limit the potential benefits of these opportunities.”