Transport has shrunk as a share of infrastructure investment, as Australia re-gears towards constructing buildings and utilities for the energy transition.
Infrastructure Australia’s market capacity report, released on Monday, reveals that investment in transport has declined by $32bn to make up a total $126bn of the pipeline. Buildings and utilities have grown to $71bn and $16bn respectively.
Infrastructure Australia’s analysis shows there will be a six-fold increase in renewable energy projects across all construction activity in Australia over the next five years.
The chief executive, Adam Copp, said governments are “changing focus to addressing the housing crisis and transitioning to a net zero future”.
Infrastructure Australia’s chief commissioner, Tim Reardon, wrote in the report that “for years, demand has been far outweighing supply, leading to cost increases and project timelines being delayed”.
“While this year we find demand to be easing, it’s clear there is more work to do, with skills shortages and cost escalations persisting,” he said.
The report found that material costs remain high, having increased on average 4.3% in the past 12 months and are on average 30% higher than they were three years ago.
Copp said 7% of the pipeline, or $15bn of planned construction work, has been “hampered by project delays”.
He told Guardian Australia there had been a “fairly dramatic decline” in investment in Victoria, where the investment pipeline decreased by $9.5bn and New South Wales, where it declined $27bn.
Copp noted state governments had delivered projects including NSW’s Sydney Metro, Westconnex and the Sydney gateway and are now focused on “getting the best out of those investments … particularly around housing” with transport-oriented developments.
Investment is shifting north, with the Northern Territory and Queensland’s pipelines growing by a total $16bn.
Although most residential construction is funded through private investment, public investment in housing increased by $2bn, up to $17bn.
The report found that projected shortages for infrastructure workers have decreased (down 32,000 compared to the 2023 forecast) as demand softens and supply grows.
But shortages continue across all three occupational groupings: engineers, scientists and architects; trades and labour; and project management professionals.
“In order to attract new workers to the industry and retain the ones we have, government and industry need to address the underlying cultural issues that are holding productivity back and driving people, particularly women, away from a career in construction,” Copp said.
