Australia’s GDP is expected to accelerate from the 0.5% recorded for the March quarter through 2010 fuelled by construction output, particularly from the engineering sector, according to international property and construction consultants Davis Langdon.

Dr Andrew Wilson, Senior Economist and National Research and Development Manager for Davis Langdon commented that although the latest building approval data showed some softening compared to the across‑the‑board leap in activity in March, planned building remains significantly higher than for the same period in 2009.

“With Building the Education Revolution building work still in the pipeline and continued growing strength in apartment construction together with the commencement of numerous resource and infrastructure projects, the construction industry will continue to operate at record levels of output in 2010,” said Dr Wilson.

“A pause in interest rate rises will facilitate house building activity with the prospect of a revival in commercial and industrial building through an upturn in the property cycle as financial markets gradually unfreeze.

“A rise in international confidence through a resolution of the Eurozone debt crisis and continued slow recovery in the economies of the US, Japan and the UK will also aid the regeneration of global growth with important implications for the Australian economy, particularly the resource sector.

“With construction output at record levels, and skilled labour shortages already emerging within a high productivity and full employment environment, the construction industry faces the prospect of wage and salary generated cost increases fuelling inflation through 2010 and into 2011.” 

For further information, contact Meaghan Jones on +61 3 9933 8800 or email mjones2@davislangdon.com.au