Infrastructure Australia’s 2024 Infrastructure Market Capacity Report reveals a recalibration of national priorities as governments turn their focus towards the housing crisis and the energy transition. 

Analysis by Infrastructure Australia has found that skills shortages, stagnating productivity and rising costs are challenging the delivery of this critical infrastructure. 

The 2024 Infrastructure Market Capacity Report shows the nation’s $213 billion five-year Major Public Infrastructure Pipeline—representing nearly a quarter of the country’s total $1.08 trillion of construction activity—is growing across energy and social infrastructure projects. 

After a decade of record investment flowing into major transport projects, investment has now dropped $32 billion to make up a total $126 billion of the pipeline, while buildings and utilities have grown to $71 billion and $16 billion respectively. 

Infrastructure Australia Chief Executive, Adam Copp, said, “This recalibration in investment is due to some governments coming off of significant investment in transport projects and changing focus to addressing the housing crisis and transitioning to a net zero future. 

“The nation’s infrastructure ambitions continue to be challenged by skills shortages, stagnant productivity growth, and rising material costs. 

“Construction materials on average cost around 30 per cent more than they did three years ago and with ongoing skills shortages we simply don’t have the people power we need to get the job done on time—our analysis shows seven per cent of the pipeline, or $15 billion of planned construction work, has been hampered by project delays.” 

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, highlighting the drive of both governments and the private sector in this space. 

“As this investment in renewable energy increases, both governments and the private sector should plan for the logistics and enabling infrastructure needed to support those projects,” Mr Copp said. 

“Equipment such as wind turbine blades can measure up to 70m in length and seven metres in diameter—we need to ensure we not only have the resources to deliver these projects, but also the enabling infrastructure required to get the resources to where they are needed.” 

Mr Copp highlighted that as the portfolio of projects is changing, there is also a shift in the location of projects towards the country’s north and to regional areas. 

“We are seeing the Northern Territory and Queensland’s pipelines growing by a total $16 billion, while New South Wales and Victoria’s pipelines have decreased by a total $39 billion,” Mr Copp said. 

“The biggest challenge that comes with increasing activity in regional areas is how to attract workers as well as get the materials needed to complete these projects.” 

Meanwhile, productivity growth in the construction sector has stagnated for more than three decades while other sectors by comparison have advanced, Mr Copp said. 

“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. 

“This should be an industry of choice, but the reality on the ground is it’s a harsh working environment—we see burnout, stress, and incredibly poor mental health and wellbeing. 

“Addressing culture will be critical to ensuring we can deliver the nation’s infrastructure priorities.” 

Roads Australia response 

Amid the release of the new report, Roads Australia has urged Australia’s governments to keep investing in transport infrastructure.

Roads Australia CEO, Ehssan Veiszadeh, said, “Transport is the backbone of our cities and regions. It’s critical to our quality of life and it must remain an investment priority for all governments as our communities continue to grow.

“Transformational transport projects have opened to the public this year in every state and territory, with many more in the final stages of delivery. These projects bring enormous economic benefits, connecting people with jobs, education and essential services and creating vibrant public spaces.

“But there are still many communities that bear the brunt of congested transport corridors, that are crying out for safer roads, or that have no access to any public transport services at all. There is an urgent need to plan ahead and to think seriously about how to address these infrastructure gaps,” said Mr Veiszadeh.

Mr Veiszadeh said multi-decade planning and a rolling pipeline of transport investment was vital to maintain living standards in Australia’s cities and regions.

“There has been a necessary course correction in recent years to address cost overruns and ensure Australia’s infrastructure sector can appropriately meet demand, however we are now heading too far in the opposite direction.

“Constrained government budgets should not stop us from having a long-term plan for the future of our transport system, particularly as it plays such a significant role in enabling access to affordable housing.

“We welcome the Australian Government’s allocation of an additional $2.7 billion to infrastructure last week as part of MYEFO. This is an important step in the right direction and will help deliver major road projects and upgrade essential infrastructure across the country.

“With a growing population, we need to be ambitious about transport again and focus on what our communities stand to gain,” Mr Veiszadeh said.

CCAA response

Cement Concrete & Aggregates Australia (CCAA) has welcomed the findings of Infrastructure Australia’s latest report. 

CCAA CEO, Michael Kilgariff, said, “The 2024 Infrastructure Australia Infrastructure Market Capacity Report confirms that securing an efficient, sustainable and affordable supply of heavy construction materials is essential to delivering Australia’s $1.08 trillion five-year construction pipeline. 

“The 2024 Infrastructure Market Capacity Report reconfirms that challenges such as material shortages, cost pressures, logistics and regulatory approvals continue to have an impact, particularly in the supply and sustainability of essential construction materials: cement, concrete, aggregate, and sand”, Mr Kilgariff said. 

The Market Capacity Report highlights that concrete is the most in demand construction material, with 137 million tonnes required over five years for infrastructure projects. 

CCAA supports the call for a nationally coordinated strategy to stabilise raw material supplies, particularly through faster quarry approvals to meet growing demand. 

“An essential component of this strategy would be to expedite quarry approvals, as the availability of raw materials like aggregates and sand requires fast-tracking approvals for quarry expansions to meet growing demand in the right place at the right time, particularly where urban encroachment threatens existing resources,” Mr Kilgariff said. 

“The report also promotes circular economy principles such as recycling of demolition materials to ease reliance on natural resources and emphasises policy reforms to accelerate the adoption of low-carbon cement and concrete, aligning with Australia’s net-zero goals. 

Mr Kilgariff said industry is already well progressed on these issues, with government regulation often a barrier to progress. 

“The key message remains that concrete, aggregate and sand are the dominant materials facilitating affordable, lower carbon building and infrastructure. 

“The closer materials are to where they’re needed, and the more governments streamline approvals and support industry-led recycling initiatives, the better the outcomes for our common goals. 

“The heavy construction materials industry is not only critical to Australia’s $1.08 trillion construction program, including the $213 billion five-year Major Public Infrastructure Pipeline, but also central to achieving a sustainable, low-carbon future.” 

Mr Kilgariff said by implementing the recommendations of the 2024 Infrastructure Market Capacity Report and embracing a unified, circular economy approach, Australia can secure the materials needed to deliver world-class infrastructure while reducing environmental impact. 

“CCAA stands ready to work with government and industry to turn these ambitions into reality, ensuring the nation’s construction and infrastructure needs are met efficiently, sustainably, and innovatively.” 

To read more about the 2024 Infrastructure Market Capacity Report and Infrastructure Australia’s Market Capacity Research program, visit infrastructureaustralia.gov.au

 

Source: Infrastructure Magazine

 

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