2018 CCF Victorian Infrastructure Outlook Report 1 | Page 15

Consequently, domestic demand growth will improve
markedly late in the decade, as the declines in mining
and residential investment bottom out and start showing
signs of recovery. Capacity constraints and expected
improvements in business confidence are predicted to
drive an acceleration in non-mining business investment.
However, until that time, economic growth and inflation
are expected to remain relatively subdued, with the
Reserve Bank unlikely to be in a position to raise interest
rates until 2019/20.
Outlook for Victoria
Differences in the timing and magnitude of regional
investment cycles are creating large differences in
economic performance and construction activity by
state. Strong pipelines of infrastructure projects, relative
undersupply in housing, higher population growth
and private sector confidence to invest is driving a
construction upswing in New South Wales and Victoria,
which in turn is spilling over into broader industry and
economic growth.
Regional Rail Link Project
Source: V Line
Figure 1.4: Comparisons of State (SFD) and National (GNE) Growth in Final Demand
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