Signs point to continued support for infrastructure and civil works.
Governments around the world have seized on infrastructure as a tool to push their economies forward through a coronavirus-driven recession.
So, despite concerns about supply chains and governments’ long-term finances, much of the infrastructure and civil works sector is cautiously confident of its medium-term prospects.
Nicholas Fearnley, Senior Economist at BIS Oxford Economics, said Australia’s infrastructure and civil works sector is holding up far better than retail trade or tourism.
Road and tunnelling works could even pick up in markets like Sydney and Melbourne.
A risk to infrastructure and civil works is the possibility that supplies of crucial equipment and components will be interrupted.
But Fearnley sees signs that recovery in China, the biggest source of imports for the sector, may minimise supply chain problems.
So far, most signs point to Australian governments giving continued medium-term support for infrastructure and civil works.
The Federal Government is sending clear messages that it wants to keep infrastructure and civil works going in the months and years ahead.
A spokesperson for the Department of Infrastructure said that ensuring construction works can continue was “critical for jobs and the economy”. By improving transport connections, the spokesperson said, infrastructure projects would also “help us to bounce back after the COVID-19 crisis has ended”.
Jonathan Armstrong, Director of the Australian arm of systems and engineering technology company Frazer Nash Consultancy, is confident that Australian governments will continue infrastructure investment, even in a post-coronavirus world.
“With the major infrastructure projects that are in play all around Australia, they will move them forward,” he said.
State and Federal governments will have “some holes punched in their balance sheets,” said economist Saul Eslake. Still, he thinks government projects will continue to be big business.
“Bringing forward infrastructure projects is something you might want to do once you move past the lockdown stage,” Eslake said.
Engineers Australia CEO Bronwyn Evans is convinced the Government must push on with projects.
“Don’t pull back,” she said. “Don’t lose the momentum already in the sector. Engineers can continue to deliver through this period.”
Evans is also convinced engineers can find ways to ensure projects keep going safely.
“Engineers will work out ways to work smarter,” she said, citing their use of tools like digital twins and building information modelling or BIM.
The important thing now, Armstrong argued, is that the industry continues to build.