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Introduction - Construction Industry Economic Outlook
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In this report there are two parts one is the theoretical approach to the application and another one is based on the practical report to the client which is based on the case study which is given bellow in the part B. In part A there are details of the current and past five years of the economy of Australia, the macro-economy of the country and which are affecting this macro-economy. There are discussions of many types of construction industries that are there to improve the current state of economy of this nation. The contribution of the construction industry in the field of economy is also mentioned in this part A (Ahmed, 2018). After that the last part comes which is named as part B. In part B the details of the Coastwide and its vision of the future construction is described. Coastwide is making sure that the future construction will come to it and their target is to make this construction in the other parts of the country. There is the comparison of the engineering construction sector to the other construction sector. There are mentions of three construction projects that will give this company an edge of facilities that are there to provide to the other construction companies. Lastly there is the conclusion part where one of the three projects is taken into consideration, the consideration is there to give the client an overview of the project, and perhaps the client will participate in the project. Or some other kind of recommendation which a client can adapt in the construction industry.
Part A: Theoretical application
1.0 The Economy of Australia
Australia is a country that has not experienced any annual reason in the year between 1992 to 2018. The GDP of this country has grown to a level of 3.2% as annual growth. In the year of 2019 the first three month the growth is 0.4%, the worst rate is happening inthe month of september (Yazdani et al. 2021). This happens in global financial crisis time. In this period of march 2018 the compartios is done on the economic growth. The economy has increased by 1% this time period. Reductions in domestic household spending are one reason impeding the economy's expansion. Australian consumers reduced their discretionary spending in the hospitality, estate development, and recreation sectors in 2019, according to Letts & Janda (Babalola et al. 2019). It was thought crucial to significantly raise non-discretionary spending in the areas of indemnification, power, and healthcare. Since quarter 2, 2018 the GDP growth of Australia is on the slide. The economy expanded in the year 2017 to 2018 is 208% this is the “chain volume term” economy. The GDP growth is increasing because of various other factors but the main factor is the mining operation in the construction industry. The mining industry gives 0.48 percentages to the periodical GDP to the nation of Australia, this happens in the year of 2015. The financial and the insurance sector is there to give 0.45% of growth in the same year.
2.0 Display of macroeconomic performance
The macro economy is one of the main ways of the GDP growth of the economy of a nation. Inflation is a barrier in this growth of macroeconomy. This inflation increases the price of daily goods and products that are there for middle class people, so the inflation affects the economy very badly. In this recent time the inflation is increasing because of the increase in crude oil price all over the globe due to the Russia-Ukraine war (Bourne et al. 2018). The inflation will increase 1.6 percent in the year of 2019 and 7.75 % in the year of 2022. Every price of food to foot wear is increased. But the foreign exchange reserves have increased. In the year of 2017 the reserve was 23 billion dollar and the year of 2022 this increases upto 35.5 billion dollar.
The unemployment level is measured by the unemployment of a country. The unemployment rate will increase from 5.2 % to 5.3 % from june to july 2019. And this year the unemployment rate is increased upto 5.5 % in june 2022. The unemployment of students or workers makes the economy rise low in the long term. Because there are so many things which will happen if the unemployment rate is increased. The government will not get taxes and the per capita income will go down. All these situations will affect the economy significantly. The unemployment rate decreased from 5.5 % in June 2022 to 3.5% in August 2022 (Chi et al. 2021). This number is showing the good things for the economy and will be good for the country in the long term. Both unemployment and employment rose in July, with a rise in unemployment of 6,600 people. There was a rise between June and July. The employment rate grew by 24,600 people, continuing with a steady decline in unemployment over the preceding five years. The ACT ("Australian Capital Territory") now has the lowest level of unemployment among Australian territories and states, with such a rate of 3.5 %, while South of Australia has the most, at 6.9 percent.
2.1 Debt level
The foreign debt increases if there is the need of borrowing money from another country. This borrowing is increased in the year of 2019. From $2,110,000 million in the first quarter to $2,140,000 million in the second quarter (Ma et al. 2020). It increased upto $963 billion in the year of 2022 in June (Hong et al. 2018). The foreign debt is raised from 2014, just few showing of componentes which occurs for just one year of preceding. There are two conditions of taking the loans from a country. These conditions are two ways. If “A” country takes a loan from country “B” through the condition of country “A” then the loan will help the economy of that country. However if this happens other way around then this loan will affect the economy of this country in a more harmful way (Kabirifar et al. 2020). If the interest rate of these debts are high then the country suffers to give the loan back. This will increase the downfall of the currency of the country. In this case, Australia is a popular destination for business and live life and the foraging relation of these countries to the other superpowers are good so the interest rate is not high and will be helping the economy in a good way.
3.0The Construction Industry Performance Indicators
The construction industry performance indicator is measured by the three factors, which are mentioned underneath the structure.
One is the constructive engineering, another one is the construction of the non-residential building, and the last one is the residential buildings.
3.1 Constructive Engineering
Engineering construction is one of the most significant subsectors in the construction industry. It consists of significant mining, infrastructure, and industrial resource projects. In the 2019 March quarter, trend forecasts for all engineering construction decreased by 4.4%. This can be attributed to a 5.9% decline in construction works in the public sector during the March quarter as well as a 3.2 percent decline in engineering projects in the private sector during the same period. The industry of construction generates over 360 billion dollars in Australia (Li et al. 2020). This produces the solid 9% GDP of the country. In addition, in the next five year the growth will increase to 2.4%.
The Engineering construction is currently benefited by the transportation industry as it increased by 24% over $30 billion in 2017–18. The most frequent engineering project was road building, followed by railroad construction.
3.2 Non-residential Building
The “non-residential building” construction is also increased in the year of 2017 and 2018. Another significant area of the construction sector is non-residential building construction. This category includes buildings including dining establishments, offices, lodging, homes, and health care facilities. For the majority of the 2010s, non-residential building stayed constant, although a recent spike has led to increasing activity. The value of $35.6 billion in the year of 2012/13 of non-residential building was there, and about 8.1 % of the entire value of the construction industry, but it increased to 10.6 percent, or approximately $41.3 billion, which was a new high, in 2017/18. The business of the non-residential buildings is 9,170 in the year of 2022. This is a decline from the 2021 numbers and this decline is approximately 0.6% (Ma et al. 2019). The extended building construction indicates the market of the building construction in this year's average. The building of health buildings is also significantly influenced by factors in and beyond the industry's jurisdiction, like state financial aid and the increase in population, which raises the need for new economic development. The non-residential buildings are like the buildings of the office, shops, cafes, and hospitals etc. that are there to make the industry more powerful. The construction industry made a good amount of profit by making these non-residential buildings. As this picture shows, the non-residential construction market is about 85.8 billion USD in 2022 and this construction will be increasing to the amount of 142.1 billion USD in the year of 2025. The future in this making of the non-residential building is bright and the contractor should work in that way.
3.3 Residential Building
The field of construction will have the residential division in this field of construction. This includes the residential structure of the house such as the dwelling, apartments, duplexes, renovations etc. The residential building has its own financial growth report. In this report the growth is shown below.
In 2015–16, there were over 233,900 new homes being built, breaking the previous record set in 2011–12, when only 145,400 dwellings were constructed because of the global economic crisis. The increase in residential development can be attributed to an increase in global land holdings, low finance costs, and an increase in global transfers in the year of 2019 in Design & Construction Industry Forecast (Minunno et al. 2018). This increase is the design of apartments and the increase in the field of construction industry. The numbers are increased from the year of 2017 to the year of 2022. This industry development is attributable to the number of houses of this country. When isolated land division is limited in metropolitan areas, factors like residential normalcy increase demand, prompting the search for alternatives.
4.0 Performance of the Construction Industry in Relation of the Australian Economy
The building industries are currently producing the overall 9 percentages of GDP to the nation of Australia. This construction industry is also a non-service industry because after construction is done the building will stand for a lifetime so there is no service after the construction. This non-serviceable industry gives a 134.2 billion dollar contribution to this country in the GDP. Approximately more than 1 million people are directly or indirectly joined to this construction industry (Mostafa et al. 2020). This big number will make this industry more popular than any other business. The following are the numbers and data for the given section, which tells the drop in rates of consecutive quarters.
One sector that is anticipated to expand is non-residential. This will have a substantial impact on the country's economy and help to mitigate the drop in the residential and construction sectors with a 7.8% expected growth. The Australian federal government is making an influence on the building sector through the $75 billion national ten-year framework that is a part of the 2018 "Federal Budget". This plan puts an emphasis on developments including upgraded roads that connect to the Bruce and "Pacific Highways", the "NorthConnex" and "Bringelly Road" enhancements, and Victoria's Metro rail service.
Part B: Report to the client
1.0 Comparison of engineering construction
The construction sector has decreased by 4.4 percent over the previous term, indicating a slowdown in the industry (Murphy et al. 2019). This is due to a reduction in mining-related funding, which has led to a decline in infrastructures connected to mining. Because it's one of Coastwide Building Pty primary's business sectors, a defeatist reduction tendency will harm the entire company. The largest opportunity in upcoming years for developing the outsider and domestic sectors. The development of the modern residential houses increased in the year this happened due to many migrations and the land volume is limited in the city so the multi story residential house will be increasing day by day. The other kind of buildings (commercial buildings) are constructed. For this the land is getting limited.
2.0 Identification of construction projects
In 2036, “New South Wales” will need to support 30% more auto trips, 113% more trains, and 40% more homes, according to the New South Wales Governing organization. Coastwide Construction Pty (Ogunnusi et al. 2020) has identified additional three construction-related development opportunities for CCCMC. Here are a few examples:
The M4-M5 Linking Tunnel as well as the M4-M5 Link From inside Intersection are two of the ongoing projects that WestConnex is working on to build additional road and underground infrastructure in Sydney. Two portions are being built: the Rozelle Interchange and the connecting tunnels between Highways 4 and 5 (Perera et al. 2020). The first stage will be the Motorways 4 and 5 connection tunnels, which link the rebuilt Motorway 4 near Haberfield to a modern M5 at St Peters. This project will be completed in the year of 2023 and these two are the most important parts of the WestConnex construction.
2.2 Upgrade of Pacific Highway
The upgrade of the pacific highway will be done from Woolgoolga to Ballina. This project cost around the $4.9 billion mark. After completing the upgrade, the road will be completed as “Queensland Pacific Highway” (Sepasgozar et al. 2020). This road is a multi-lane motorway and it will save 25 minutes of time in this road travel and increase the security of the travel and decrease the accident rates. The black spots are there to increase the overall security of this highway.
When the 155 km project is finished in late 2020, there will be 170 bridges and nine intersections, avoiding places like "Grafton South", "Ulmarra", "Woodburn", and Wardell.
2.3 Sydney Metro City & Southwest
This construction, which is considered as Australia's largest mass transit project, would provide a new train line between “Sydney's north-west”, underneath Sydney Harbor, stopping at the new subterranean stations, and passing through until “Sydney's south-west”. When it is done in 2024, Sydney will possess a 66-kilometer standalone rail network with 31 metropolitan railway stations (Wu et al. 2018). The modern railways are there to make travel easier and faster. The planned work is shown in Figure 5 along with the scheduled completion date. As a part of the brand-new metro service, a metro train will depart from Bankstown. The modern Sydney service of railway will be producing will divide the access of railway system to the local areas which will eventually minimize the waiting time.
3.0 Recommendation for Coastwide
Coastwide Building Pty should start enlarging its business with more construction-related divisions. By accepting new projects, Coastwide Building Pty can continue to grow its portfolio and, if they so want, expand their business nationwide. As was already indicated, the construction business is declining, with a particular concentration on the mining sector, which may limit the options available to Coastwide Construction Pty (Xia et al. 2018). One architectural infrastructure project they might collaborate on soon is the Sydney Metro network. Such a project will require a sizable amount of work force, making Additional sources of information Construction Pty a great candidate to highlight their capabilities. Additionally, working on projects of this size will give “Coastwide Construction Pty” expertise inside the industry of construction, which can lead into offers for future projects.
This report will talk about the recent economic situation of the nation of Australia and its current operation on the construction industry and its construction project. The first part is mentioned more about the recent circumstances of Australia in the field of economy, residential housing, non-residential housing and other types of construction projects. In the part the report mentioned about the Coastwide construction Pty and its workers which will be improving the current economy of the current state of the Australian construction industry. The expanding residential and non - residential building divisions of Coastwide Construction Pty are linked, therefore this is a realistic prospect for them. Residential development is still an option for long-term success inside the construction sector, despite a decline in the most recent quarter. At last, Part B offers “Coastwide Construction Pty” advice on how to expand their business and thoroughly investigate the contracts they accept if they intend to stay in the construction industry. The recommendations of the given construction projects are interlinked with the Coastwide construction Pty Ltd, which is a Newcastle based building construction company.
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