Economic recovery lifts construction expenditure
With signs of economic recovery, there was a distinct improvement in sentiment across Australian and New Zealand construction markets in Q4 2020.
As restrictions continued to ease across Australia from the relatively low COVID-19 cases, consumer and busines confidence strengthened and economic activity gained momentum. In New Zealand, the impact of COVID-19 on the country’s construction industry was significant, however, there are now signs that recovery is underway.
Our latest report finds that 2021 construction cost escalation forecasts for non-residential construction is reported at 0 percent for Adelaide and 0.5 percent for Brisbane, Melbourne, and Sydney, 1 percent for Christchurch, 1.5 percent for Auckland, and 2.0 percent for Perth.
Economic recovery is underway
Australia’s Gross Domestic Product (GDP) rebounded by 3.3 percent over the September quarter, indicating that the economic recovery is now underway. Low unemployment, robust consumer spending and improving trade flows were the key drivers of this growth. Consumer and business confidence continue to strengthen, supported by government stimulus and the schedule roll-out of the vaccine across the country.
While the country’s economic situation is improving, there are downside risks which continue to cloud the short-term outlook. The loss of international tourism and students, as well as increased trading tensions between China and Australia present downside risks to the outlook for 2021.
New Zealand’s GDP rebounded by 14 percent over the September quarter, the largest quarterly increase on record for the economy. The ongoing robust government fiscal and monetary policy is helping to generate economic activity and provide support for businesses and consumers. The economic is forecast to continue to strengthen over 2021, in line with the roll out of the vaccine.
The COVID-19 impact on commercial occupiers
In Q4 2020, we undertook a market engagement survey with participation from of our commercial occupier key clients across the globe to understand the impacts of COVID-19 on the sector. The findings, although mid-pandemic, are a sound indication of how different organisations are dealing with the pandemic in real time. The survey focuses on how organisations are responding to the new normal and adapting their workplace strategy.
Download the report to read more about the challenges and opportunities affecting the construction industry in New South Wales, Queensland, South Australia, Victoria, Western Australia and New Zealand.
Please visit our COVID-19 response page for all of our resources relating to the impact of COVID-19 on the construction sector.