Oxford Economics Australia Global Economic Outlook – March 2024

The annual Oxford Economics Australia Global Economic Outlook Conference was held in Melbourne this week, and as usual, an interesting outlook.
The megatrends impacting on the construction/civil engineering sector are:
1. Population growth РAustralia’s population increased by 548,000 to September 2023, an increase of 60% from the previous year.
2. Infrastructure catchup – transition from transport to social, utilities and resources.
3. Climate targets – Oxford Economics estimates Australia will come close to meeting our 2030 emissions target but is way off course to achieve net zero by 2050.
4. Cost escalations – unemployment has fallen to 3.7 % in February (while the Infrastructure Australia Market Capacity Report estimates a shortfall of 229,000 skilled workers), combined with debt challenges and supply chain constraints (eg sand, cement, copper etc).
5. Regional boom – driven by resources and the energy transition.
6. Geopolitics and defence – geopolitical tensions and an evolving Australia defence posture.
While transport infrastructure is still a big spend, it will peak around 2027, and the move towards renewables and in particular transmission, is now kicking in. This will drive a large growth in regional infrastructure spend, however the quantum will still remain higher in metro areas.
While NSW is still investing in transport infrastructure off the back of past asset recycling, QLD and WA have the strongest outlook in the medium term.
However, a looming concern is escalating state debt, potentially leading to the deferral or cancellation of vital infrastructure projects, posing a key risk to the sector’s trajectory.
Michael Kilgariff, Adrian Hart, Nicholas Fearnley PhD and Timothy Hibbert
#transportinfrastructure #transport #renewables #transmission

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