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25 Nov
ACORPP Market Voice Construction - The Construction Market

By Gordon Bateup

Construciton Market Voice Amended

An online Fairfax Media article recently asserted that there would be enough vacant office space in the Perth CBD to seat the entire population of the southern suburb of Canning Vale (approximately 30,000 people), once current office construction projects were completed.  

In light of that daunting statistic, it would seem counter-intuitive that further construction could be a way forward in the current malaise that has depressed the WA economy.

However, instead of immediately dismissing that as an unviable business strategy, let’s just take a closer look at what’s currently going on and what benefits there might be in a proactive construction approach.

The downturn in the mining economy has swelled the ranks of businesses that can support construction and these firms now need to develop new revenue streams in non-mining industries.

They have been joined by experienced tradespeople and other skilled and unskilled workers who have been retrenched or have otherwise moved out of the mining sector.

These two factors alone have now injected new competition into the construction sector creating a pool of highly motivated businesses hungry for projects.

After years of having to compete with the high-paying mining sector, these businesses now have access to a workforce that is highly skilled and looking for mid-term employment certainty and security.

This has created an environment where there has never been a better time to commission a construction project. 

But where are these projects likely to come from? Certainly there will be less focus on the CBD. Big office tower projects not already planned are unlikely to come back into the reckoning for a few years.

Having said that, we will shortly see the “soft” opening of Elizabeth Quay. Love it or hate it, that exciting new precinct has been slated to be a hive of construction activity over the coming years. 

GB Market Voice

Of course, new residential buildings and the stadium project at Burswood continue apace. And on the subject of stadia, the future of Subiaco Oval may be known in 12 months, with the options likely to include a model for redevelopment. There could also be a level of redevelopment for the WACA once the cricket (largely) moves to Burswood. 

Elsewhere, the Metropolitan Redevelopment Authority has other plans near the Swan River.

Outside of the CBD, there are plenty of government infrastructure projects with contracts expected to be signed on the new Roe 8 highway extension before the end of the year. An unknown – at this time – is how that project will be further extended from Stock Road into the Fremantle Port. It could possibly involve a tunnel. 

There’s also the Perth Airport Forrestfield rail link that will begin construction next year. Perth Airport is also well advanced on its renewal with the new T1 Terminal opening shortly.

Shopping centre developments are another source of construction and Innaloo might well become a model of the mooted new “mini-CBD” hubs, with a commitment for its substantial redevelopment including “inner city” living including residential, shops, businesses and recreational areas.

Other promising sources of construction projects are likely to include private education and health-related facilities like aged care. The latter is experiencing growing demand as a consequence of better health care and increasing longevity. 

All of this potential and the change to a Prime Minister with a message of confidence, lends promise to the very real possibility that we can, effectively, build our way out of the state’s current economic malaise. 

The challenge to every business related to the construction sector is to ask and answer this key question: how can you best position yourself to be part of a potentially healthy and prosperous future?

 

Further reading:

Interstate boom

Turnbull factor

Construction and employment

Perth vacancies

 

 

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