The largest construction projects are flowing into Western Australia and Queensland and away from NSW and Victoria, a new report has revealed.
The Australian Bureau of Statistics data showed that at the end of December 2009, a record $133bn worth of construction work is currently underway and waiting to be completed. For the first time, the Gorgon natural gas project in WA was included in the data. Residential and commercial construction work yet to be done stands at a whopping $45.8bn - double the work that existed five years ago.
"It's clear that Australia is experiencing its greatest construction boom with over $130bn worth of construction projects underway - triple the amount of work that was outstanding five years ago, and representing just under 11% of GDP," said Craig James, chief economist with CommSec.
"Investment flows have markedly shifted away from NSW and Victoria to the resource states. A decade ago, around a quarter of private investment occurred in WA and Queensland. Currently, the resource states account for around half of all new private investment in buildings and equipment."
James noted that with the commencement of the Gorgon natural gas project, 66% of all engineering work underway is in WA, with 82% of all projects located in WA and Queensland.
Together, WA and Queensland account for 36% of Australia's economy compared to 28% in NSW. WA and Queensland also have just over 30% of Australia's population and should pass NSW in terms of population share over the next few years, according to James.
"Activity in the resources states - WA and Queensland - and to some extent Northern Territory, will continue to soar. The workers, raw materials and equipment required for the mining and engineering projects will have to come from the southern states and from abroad. Construction, mining and transport sectors will expand, at the expense of manufacturing and possibly finance and tourism sectors. And economic activity and importance will continue to shift from the southern states, northwards and westwards," said James.
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