Mar 19, 2019

Civil Construction pulls it weight

Civil Construction pulls it weight

Policymakers will be keeping a good eye on the fortunes of civil contractors following the release of a report highlighting their contribution to the North Queensland economy.

Civil contracting – moving earth, laying pipes, putting down road pavement and building bridges among others – is to construction what trusses are to a roof.

The Cummings Economics report, The Importance of the Construction Sector and Civil Construction in the Northern Queensland Regional Economies, was released just weeks following the recent Townsville and North-West flooding.

Economic activity generated by the construction sector, including ‘flow-on’ effects, was estimated to make up about 18 per cent of Gross Regional Product (GRP) in the area, with direct output estimated at $9.8 billion, and directly employing about 23,000, the report said.

Bill Cummings – Cummings Economics

In the civil construction field, the estimated 4600 employed account directly for a turnover of about $2 billion, according to principal Bill Cummings.

“The flow-on effects are estimated to lift total employment generated to about 11,500. That’s around 20 per cent of the total workforce generated by the overall construction sector including ‘flow-on’ effects,” Mr Cummings said.

“(Typically) with construction, most of the money that comes in will not take business away from other activities. So, there can be expected to be a maximum flow-through.

“Typically, policymakers take account of the direct impact of construction.

“They know it is an important part of the economy. They now have a better appreciation of the contribution of civil contractors in construction.”

The report tells a story of the construction sector’s relationship to the fortunes of mining.

In 2016, the number of workers directly employed in construction in northern regions was about 7.5 per cent.

Most were in the immediate Cairns region with the outlier being the ‘Outback Far North’ where construction accounted for 4.8 per cent of workers.

Across the board, numbers employed in construction rose 12 per cent in the five years to 2011 and fell by 20 per cent in the following five years to the 2016 census.

That is due mainly to poor demand in Townsville and Mackay, which the report relates to the slump in mining infrastructure investment.

This story is also recorded in building approval figures.

Residential approvals in Townsville dropped from 1733 to 735 in the four years to the 2017-2018 financial year.

At the same time in Cairns, that figure rose by more than 50 per cent to 1549.

Activity in the greater Mackay region fell strongly from 2013-14 to 2016-17. However, figures bounced back in 2017-18.

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