INSIGHT
What’s driving Australia’s infrastructure recovery
Australia’s post-COVID recovery will be driven by a number of factors – among them, an almost-bursting infrastructure pipeline, headlined by crucial projects in two key sectors: transportation and energy.
ANZ Research’s Major Projects Report, due for release later in February, outlines the scope of the major projects planned or already underway in Australia, and the expected impact on Australia’s economy.
But the major drivers of the infrastructure pipeline are already clear – particularly in the electricity and rail sectors, with several multi-billion-dollar projects under construction or scheduled to commence by 2022-23.
You can see details of the pipeline in the infographic below.
On track
Major rail project investment shrank in 2019-20 but from 2020-21 onward, the potential pipeline exceeds previous ANZ Research expectations.
The upcoming Major Projects Report suggests the peak in Australia’s potential rail investment pipeline could now be close to $A20 billion in 2022-23; up from previous forecasts of $A15 billion.
It’s important to note much of this is due to cost hikes on projects underway or in planning, rather than more projects. Across just five of the biggest projects, cost estimates are up $A17 billion. You can read more in the report.
Investment in major electricity projects was less than expected in 2019-20, and ANZ Research expects a further decline in the current financial year.
But the medium-term outlook remains positive. In 2021-22, the pipeline could almost double, to average more than $A12 billion a year over the rest of the forecast horizon.
Read ANZ Research’s Major Projects Report, set for release on February 11, to find out more.
Catherine Birch is a Senior Economist at ANZ
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