I thought I'd start a new thread about how state and federal governments will likely boost infrastructure spending and how/if NRW is placed to win this work. NRW is otherwise likely to see reduced demand for Golding housing projects in QLD but I suspect this could easily be offset by extra civil work from gov.
We've been talking about this for a few years and while the level of activity is reasonably high (although delays have occurred repeatedly on projects), it could easily jump over the coming months as govs urgently try to support employment.
As a start, industry actively lobbying gov and proposing changes:
"The Western Australian civil construction industry is ready to partner with government to fast-track infrastructure projects and provide a much-needed economic stimulus, says the industry’s peak body.Civil Contractors Federation WA CEO Andy Graham said the private sector civil construction pipeline in WA was already feeling the effects of the COVID-19 crisis, with regular reports of projects delayed or deferred.“Now is the right time for the State Government and Local Governments to step up and accelerate their project pipelines,” he said. “They will get great value for money, they’ll keep a vital sector of the economy healthy, and the community will benefit from upgraded infrastructure, improving productivity and quality of life for this generation and generations to come.”Mr Graham said it was vital that any infrastructure stimulus package of projects provided a broad spread of opportunities for contractors of all sizes, particularly local mid-tier contractors who were the most consistent contributors to the local economy and a source of permanent employment for thousands of Western Australians."
(General story about how housing industry proposes cutting red-tape and boosting shovel-ready projects)
Also, the 'broken' contracting model on the east coast that JP referred to some time back maybe will evolve as top level contractors all suffer loses from recent projects where they bidded with too low margins and took on too much risk. They appear determined to change: e.g.
"John Holland chief executive Joe Barr says the construction industry is on the brink of collapse and is not sustainable after the builder of Melbourne's West Gate Tunnel and the Sydney Metro reported a $59.6 million annual loss.“I won’t sugar coat it," Mr Barr told The Australian Financial Review. "Tier one contractors in Australia are not making any money, and governments across Australia keep having successive project cost blowouts."“We are in the midst of Australia’s biggest infrastructure boom, but as an industry, we are teetering on the brink of collapse."
Finally some green shoots for govs reacting to the situation relating to infrastructure:
"South Australian Premier Steven Marshall says he won't wait for the state to be ''kicked in the guts" by the economic fallout from coronavirus so soon after a hit from bushfires, as he unveiled a $350 million stimulus package which will send the state budget into the red for the next two years.The package is designed to work side-by-side with a much bigger Federal Government stimulus package to be announced by Prime Minister Scott Morrison on Thursday, with the South Australian package heavily focused on ''shovel-ready'' infrastructure projects, maintenance, road repairs and tourism infrastructure."
"NSW will spend $70 million to fund housing infrastructure in Sydney's north-west and will fast-track significant developments, rezonings and development applications in an effort to stimulate the economy.The co-funding to be used on tasks such as bulk drainage works, roads and public parks would allow already-approved housing developments to get started."
NWH Price at posting:
$1.85 Sentiment: Buy Disclosure: Held
(20min delay)