Mining/Heavy Industry The mining and heavy industry sector will receive a significant boost once Loy Yang gets going. Key upcoming projects: Loy Yang Coldry Plant Project
State Analysis: Energy Projects Power Up Victoria inShare 4 With a number of upcoming resource and power projects set to begin in the near future, strong activity in engineering construction looks set to keep construction activity in Victoria ticking over for now. Three large electricity projects, the Stockyard Hill Wind Farm near Ballarat ($1 billion), Macarthur Wind Farm, also near Ballarat ($850 million), and the Shaw River Power Station at Orford ($800 million) are all at advanced stages of planning and are scheduled to begin before the end of the year. Beyond these projects, the Moorabool wind farm ($750 million) is at approval stage, but is not scheduled to start until the end of the year. The $2 billion Yallourn Gas Power Plant has a start date of November, but this date may well be pushed back as the development is still in the early planning stages. The action does not stop with electricity projects. In transport, the Regional Rail Link project continues to progress. Last month, two consortiums interested in developing the Southern Cross to Footscray stage were shortlisted. The Deer Park to West Werribee stage, scheduled for commencement next month, is at the tenders called stage.
In mining, too, the $6 billion Loy Yang Coldry Plant Project, scheduled to get going in November, is at the feasibility study stage. Outside of engineering, positive signs in building activity are starting to emerge. New home sales in August rose by 3%, according to Housing Industry Association (HIA). Better yet, on a seasonally adjusted basis, the total value of buildings approved in the state surged a whopping 14.17% in August to come in at $6.317 billion – higher than at any other time this year. Despite this, however, near term expectations for building activity remain subdued. In the December quarter, the HIA expect the seasonally adjusted number of dwelling starts to come in at 11,610, down from 12,670 in the September quarter and a long way off the 15,170 peak in the June quarter. Also, in its latest forecast to be issued early November, the Construction Forecasting Council (CFC) expects weak conditions in both residential and non-residential building activity over the next two years. Moreover, both home sales and approval data had been very weak prior to August, meaning that new building activity may well remain subdued in spite of that month’s impressive numbers. Furthermore, the August surge in approvals, primarily a result of approval of the New Swanston Academic Building at RMIT, may well be a one-off. Labour Force Continues to Tighten At the same time, the labour force appears to be getting tighter. During the three months to August, the total number of people employed in the Victorian construction industry came in at 230,500, according to the latest figures from the Australian Bureau of Statistics (ABS) – up from 223,600 in the quarter to May and higher than at any other time on record. The CFC expects conditions to tighten further in coming months. In the December quarter, the forecaster expects employment numbers to increase from an estimated 263,000, up from a forecast 256,000 in the September quarter. (Note: The ABS and CFC figures are not directly comparable.)
Key Moving Sectors As mentioned above, civil sectors such as power, transport and heavy industry are the key moving sectors in the state right now. Power Also mentioned above, activity is strong in power generation projects with a number of developments in the near term pipeline. Key upcoming projects: Stockyard Hill Wind Farm Macarthur Hill Wind Farm Shaw River Power Station Yallourn Gas Power Plan Transport Transport, which is expected to perform very strongly over the next two years, is running hot at the moment. Key upcoming projects: Regional Rail Link – Package E (Deer Park to West Werribee) Wyndham Harbour Princes Highway West Duplication – Warren Ponds to Winchelsea Mining/Heavy Industry The mining and heavy industry sector will receive a significant boost once Loy Yang gets going. Key upcoming projects: Loy Yang Coldry Plant Project Education As mentioned above, the increase in building approvals in August related primarily a surge in approvals on education buildings, resulting in a short term boost in activity in this area. Key upcoming projects: Melbourne University Peter Doherty Institute RMIT University Swanston Academic Building
ESI Price at posting:
0.6¢ Sentiment: Hold Disclosure: Held
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