2018 CCF Victorian Infrastructure Outlook Report 1 | Page 25

Engineering Construction lifted marginally in 2015/16
and set to edge higher in 2016/17
Engineering construction activity has trended down in
the three years since reaching a peak of $12.2 billion in
2011/12. Several sectors declined in activity including
roads and mining and heavy industry. In aggregate,
the completion in major projects led to engineering
activity to a trough in 2014/15. In 2015/16, engineering
activity rose to $11.0 billion underpinned by increases in
telecommunication and railways, which offset declines in
other sectors including roads.
In 2016/17, engineering activity is estimated to increase to
$11.6 billion. Sectors contributing to the increase include
telecommunication (due to the continued rollout of the
NBN and addressing mobile black spots) and, an increase
in roads and railways (impacted by the investment in level
crossing construction work). However, other sectors are
expected to record declines in 2016/17 including water,
sewerage and drainage, pipelines and harbours, and
mining and heavy industry.
Prioritising public infrastructure projects into the future
The Victorian state government has outlined plans to
invest in infrastructure to improve productivity and drive
future economic growth. The major public infrastructure
committed by the government include the $10 billion
Melbourne Metro Rail project, the Level Crossing Removal
program and the $600 million extension of the South
Morang train line to Mernda.
Over the next five four years, engineering construction
activity is forecast to average around $12 billion per
year, higher than the $10.9 billion of the previous five-
year period. Major activity will be driven by construction
within the roads, railway and telecommunications sectors.
Publicly funded work done is expected to account for
around 45 per cent of total engineering construction
activity. This proportion allocated to public funded work
has increased from around 38 per cent of the total in
the previous five-year period because of large publically
funded projects in rail and roads.
Figure 2.3: Victorian Engineering Construction, $Billion, 2014/15 Prices
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