Home' Future Building: The Australian Infrastructure Review : Volume 4 Number 1 Contents 44 futurebuilding Volume 4 Number 1
So, whether it was the government stimulus or
other reasons, the engineering construction value in
Australia continued to climb even through the global
nancial crisis. It continued climbing in 2011 to
reach $101 billion, and again in 2012, to reach $125
Everyone is now saying that doom and gloom is
upon us, but the March quarter of 2013 was higher
than the record March quarter of 2012.
The June quarter of 2013 has shown half a per
cent decline in the values, so we are not saying that
it is going to continue to grow. It will atten off, and
without a doubt we will see some decline.
But given the record levels we got to -- $125
billion worth of engineering construction in 2012,
compared to around $70 billion ve years earlier
-- there is just huge growth, and the industry has
had the capacity to actually meet the demands of
There is a lot of sentiment across the industry at the
moment. The market is coming off peaks in mining,
oil and gas, and the transport sectors. Governments at
both the state and federal levels are pursuing tighter
scal policies and a number of major projects have
been delayed or put on hold.
But I think it's important to acknowledge that
engineering construction in Australia is at record
highs. We do expect to see some declines, but we
don't expect to see it crash and burn in the near future.
Look at the infrastructure that is going to be built,
or that is planned for construction across New South
Wales and Queensland. Victoria has been quiet, but
there are some major projects coming onstream.
There is something else fundamental in our
industry, when we talk about all of these liquidations
and administrations, that we do need to look at.
Certainly it is as a consequence of the slowdown in
According to a Dun & Bradstreet survey, trade
payment terms for the construction sector have
almost doubled since June 2012 to 55.3 days, and the
national average was 54 days. These late payments
have had a knock-on effect, further impacting our
The slowdown is playing out in the listed company
space, as well, with a spate of earnings downgrades
in the mining services and construction sectors in the
past few months.
I would suggest that we need to look at the
administration ef ciencies that go on within our
industry. We're in a record boom period with a lot of
work around, and we're still seeing these liquidations,
and companies going into administration. I think that
clients and contractors need to get together to try to
understand what can be done, in order to make sure
that we bring this to an end.
Against these odds, it makes Thiess's 80-year
anniversary in 2014 somewhat remarkable. We've
survived 80 years, but it's been a roller-coaster
journey over that time. During the Snowy Mountains
period, Thiess almost went to the wall.
Just a few years ago, a couple of the major
projects we had in Victoria and in Brisbane certainly
tested our nancial capacity, and if we hadn't been
part of a much larger group, it could have been fatal.
But, given the dynamic nature of our industry and
the current challenges, I decided to share with you a
contractor's view of what it takes to manage this ebb
and ow -- the ups and downs, the peaks and troughs
in our industry.
And with this context I'd like to focus on what I
see as the vital ingredients that have held us in good
stead over some pretty tumultuous years.
Firstly, I'd like to talk about vision and agility, and
being able to seize the opportunities that come along.
As a company, we obviously have our own vision
to which we aspire. But as part of a very large industry,
we need and rely on organisations like Infrastructure
Partnerships Australia and Roads Australia, and
governments and government agencies, to drive our
country's vision forward.
As peak industry bodies, they draw together the
public and private sectors in a genuine partnership
to debate the policy reforms and the priority projects
that drive a more productive Australia.
They also help us to navigate the challenges
of our industry and, importantly, understand the
opportunities and set the agenda into the future.
I think it was a crucial day when Tony Abbott
was elected Prime Minister. He promoted himself
as 'the infrastructure Prime Minister', and he has
already outlined some of the key projects he'd like
to get off the ground, including $6.7 billion for the
Bruce Highway in Queensland, $1.5 billion for
the East West Link in Melbourne, $1.5 billion for
WestConnex, and also a determination to continue
with the NBN -- albeit probably in a different format
to that of the previous government.
Deputy Prime Minister and Minister for
Infrastructure and Regional Development, Warren
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