How Infrastructure Demand Affects Construction Prices in Australia

Engineer and construction workers on siteThe rising demand for infrastructure projects will cause construction prices in Australia to remain high, despite the slowdown in housing work.

CoreLogic said that as of September, the value of commercial projects increased by 500%. This growth trend indicated that companies would require more equipment and machinery from suppliers like RediPlant. For-hire options are a better choice, given the high construction prices.

Construction Values

More than 1,900 non-residential projects were in the pipeline for September, which are worth $32 billion based on CoreLogic’s estimates. The figure represented the biggest increase since July 2013, so companies should expect construction expenses to increase soon.

Civil infrastructure work dominated the market with almost 80% of projects accounting for the overall value. Some of these projects include the $23-billion metro tunnel development in Melbourne. WT Partnership’s report also aligned with CoreLogic’s insights, claiming that contractors in eastern and southern Australia will continue to notice high prices in 2018.

Weaker Housing Market

The WT report also said that the declining number of housing projects manifested in the number of commercial cranes at work. An index showed that 735 cranes are visible across the country recently, and these cater to commercial work instead of high-rise residential buildings.

Aside from the costs of plant and equipment, the cost of labour and base materials will increase due to the bigger demand for infrastructure projects, according to the report. If you’re dealing with a tight budget, it may be better to consider hiring a supplier that offers reasonable leasing terms for certain tools and machinery.

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Contractors should review their options for sourcing construction equipment. While demand for commercial work stays healthy in Australia, equipment rentals seem like a better choice now to deliver projects within budget.