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Aldi, Amazon lead commercial construction boom

Aldi, Amazon lead commercial construction boom

Retail giants Amazon and Aldi are leading the charge in commercial construction activity, creating a windfall for SME trades and building firms nationwide just as the housing boom starts to unwind.

Master Builders Australia (MBA) is tipping 2018 to be the busiest for the commercial construction sector in a decade. It expects to see the non-residential construction sector to post growth of 14.6 per cent this financial year, equating to $5.3 billion worth of extra work.

“Of this, [a noticeable chunk] is forecast to come from the influx of international retailers into Australia – particularly the arrival of Amazon and expansions by Costco and Aldi. The latter has plans to open another 30 stores around the country in the next 12 months,” said Matthew Pollock, MBA’s national manager, economics.

“A positive of the forecast commercial construction surge is that growth is expected to be broad based, with construction related to office space and resort and hotel accommodation also making a strong contribution.”

Mr Pollock said rapidly growing numbers of tourists from the Asian region is likely to spearhead “a major influx of Asian investment into resort and hotel accommodation”.

“This will be particularly beneficial for the Queensland construction sector as $9 billion of the $11.7 billion in projects waiting in the pipeline is allocated to major resort projects in Queensland,” he said.

The timing of this surge “couldn’t be better”, Mr Pollock added, given that residential construction is falling from its record peak and the engineering sector is expected to see another year of “consolidation”.

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“New commercial construction projects will provide job opportunities for workers who may be finishing up on major high-density residential projects over the next 12 months or so,” he said.

Trades and related businesses are also likely to be kept busy with a rise in renovation activity, Mr Pollock added.

“The surge in the pipeline of alterations and additions (renovations) work for residential builders kicked off in 2017. Last year, renovation building work reached a decade high with activity topping $8.3 billion,” he said.

“Importantly it has provided a much-needed lifeline for small building businesses outside of Melbourne and Sydney who have seen the new housing construction side of their businesses struggle in the last few years.

“In fact, while the boom in new dwelling construction has been centred on the Sydney and Melbourne markets, this is forecast to be reversed with the boom in renovation work. We expect growth to be strongest in South Australia, Western Australia and Queensland.”

Aldi, Amazon lead commercial construction boom
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