This became clear on Wednesday when Australian Bureau of Statistics figures showed WA engineering construction work for the September quarter dropped by 13.1 per cent.
The value of activity also fell in NSW and ACT, but the declines there reflected more the end of large road projects such as WestConnex ahead of the start of new ones, whereas in WA the decline was more due to labour constraints holding back private mining infrastructure work, said Kerry Barwise, consulting economist for the Australian Construction Industry Forum.
“It’s most apparent in places like WA because it’s a rather thin market,” Mr Barwise said.
“Building materials and also the difficulty in getting hold of labour is prompting not only the public sector, but particularly the public sector to tendering to put projects on the wait-and-see list at the moment.”
The constraints already playing out in WA showed the risks ahead for the larger eastern-state construction industries if global supply chains didn’t return to business as usual, Mr Barwise said.
WA’s Finance Department on Wednesday pointed to the state’s September budget announcement that $506 million of planned 2021-22 infrastructure investment would be smoothed over the forward estimates and $565 million smoothed beyond the next four years to ease industry pressure.
Increasingly difficult environment
”We are closely monitoring market conditions, as it is evident some trades and regions are impacted more than others,” a spokesperson said.
”This will continue alongside ongoing engagement with industry so that impacts to project timelines are minimised, value-for-money outcomes are achieved, our program is better tailored to reflect the latest economic environment, and the benefits for Western Australian businesses are extended for as long as possible.”
Indigenous-owned Marawar boosted the size of public and commercial projects it can take on last month when it acquired a 50 per cent stake in sister company M/Construction, and the combined entity, with current annual turnover of about $80 million, is targeting an annual $300 million within three years.
But, like other WA builders, it will be competing in an increasingly difficult environment.
“The state government certainly have slowed down their major works because it’s not in their budget, so they’ve got to go back to the re-evaluation team to work out if they can proceed or not,” Mr Matera said.
