Australian Construction Industry Forum (ACIF) will launch its new ten-year forecasts for building and construction at the ACIF Briefing to be held at International Convention Centre Sydney on Thursday 4 May.

Business and government delegates will enjoy a networking breakfast before presentation of the ACIF Forecasts, the industry’s most comprehensive forecasts until 2028. These will include the work demand for all sectors and the major projects driving much of it, as well as the labour needs and costs of construction it will take to complete it.

The ACIF Forecasts have been published since 2002 and are renowned as highly relevant and reliable forecasts for businesses in this sector. The forecasts include the outlook for residential building, non-residential building and engineering construction across Australia until 2028. Find out more about the ACIF Forecasts here.

Today, the Australian building and construction industry is buffeted by strong international factors. In the May 2017 ACIF Forecasts, industry-leading forecasters will answer the big questions that directly or indirectly impact every company and employee in the building and construction industry, and the allied manufacturing and property sectors.

Will the “Trump Bump” crunch the Australian construction market?

Markets have already driven up yields on longer term debt in the US and in Australia. The Federal Reserve Board of Governors in the US has raised official interest rates and foreshadows that more increases are on the way. The Reserve Bank of Australia is again in the spotlight as it seeks to take these and other factors into account when setting interest rates. What exactly are the factors that are weighing on the Reserve Bank right now?  What changes in official interest rates, investment and building and construction work are looming?

Foreign investor interest – waxing or waning?

Foreign investors have been busy, especially in residential property. The most recent official statistics show that foreign demand has soaked up a significant share of new apartments and this has probably contributed to sharp increases in prices and problems with housing affordability, especially in Sydney and Melbourne.

Foreign property investors are now subject to additional taxes and charges, and closer supervision. Meanwhile, some of the economic fundamentals are shifting. Regulators in China, the key origin of many foreign investors, are tightening their own controls on capital outflows. The economic fundamentals such as exchange rate differentials and interest rates differentials are also less favourable for foreign investors.

How are foreign investors expected to react? What difference will this make to the outlook for residential construction activity and other construction market outcomes?

Where is the multi-speed economy taking construction?

Swings in the economic fortunes of key industries have driven the Australian states in different gears and different speeds. Western Australia and Queensland raced ahead given the once in a lifetime mining development boom. The housing construction boom, producing record rates of growth in the building of new houses started in Victoria, spread out to other states, including Queensland, and arrived belatedly in New South Wales. These cycles are now in decline or are about to reach a tipping point.

How will further changes in gears in the economic engine room shape outcomes in activities such as tourism and education? Will demographic factors continue the surge in demand for health and aged care services and facilities? Will the coming waves of change and economic volatility continue to have an uneven impact on the different states? Almost certainly. This will also have an uneven impact on construction work and employment.

How will rising interest rates impact on the outlook for construction work and employment?

Record low interest rates have driven a resurgence in housing investment, higher house prices in key markets and higher household debt. Commentary abounds on how rising interest rates will affect housing prices, and whether this will return housing affordability to more normal levels. Some analysts are concerned about the stability of the banking system and the national economy if debt fuelled growth continues. How can we sidestep these problems? What policy settings are required and where will good luck or good management prevail? How will this impact the outlook for construction work and employment?

Registration for the ACIF Briefing is available online here.