Gone are the days of the ever-escalating infrastructure expenditure charts resembling Mount Everest (see chart below). Here in 2024, it seems we're at the peak, looking down at a changing landscape.
Source: Infrastructure Pipeline by Infrastructure Partnership Australia
New South Wales is experiencing a significant decline in infrastructure spending. Data from the Infrastructure Partnership Australia (IPA) reveals a drop from over $7 billion in Q2 2024 to a projected $4 billion within three years – a 43% decrease (see chart below).
Source: Infrastructure Pipeline by Infrastructure Partnership Australia
Key Sector - Pipeline Forecast in NSW
While the overall picture shows a decline, the story within each sector is unique:
Transport (Road & Rail): Similar to the overall trend, spending in this sector is projected to fall from over $4 billion per quarter to $2.5 billion in three years (a 38% drop).
The Energy Conundrum: This sector appears to have received a temporary "sugar hit." Spending is expected to plummet by a staggering 67% within three years, dropping from $1.5 billion to $0.5 billion per quarter.
Social: Social infrastructure spending offers a contrasting perspective. It's currently at $1 billion per quarter and is expected to remain relatively flat over the next three years.
The significant decline in energy spending raises concerns. Given the urgency of the climate crisis and the need for a renewable energy transition, maintaining current spending levels beyond three years might be crucial. Additionally, the flat social spending trajectory is surprising considering the current housing crisis and school place shortages.
Workforce Shortage: A Paradox
While infrastructure spending is projected to decrease, the Public Infrastructure Workforce Supply Dashboard by Infrastructure Australia paints a different picture. It forecasts a significant shortfall in project managers and engineers in NSW, with a peak gap of 20,000 expected by mid-2025 (half attributable to project managers alone). This looming skills shortage seems incongruous with the declining expenditure.
Could this indicate that in light of a diminishing NSW infrastructure spend we will continue to have shortages of skilled project managers and engineers in NSW?
Source: Infrastructure Australia
Key Takeaways
Forecasts - A Guide, Not Gospel: caution is necessary. Data gaps and misinterpretations can occur.
Cyclical booms and busts can often be overhyped: A projected $4 billion NSW spend in three years' time is still significant.
Workforce shortages: The skilled labour shortage looks set to continue.
The Future: Navigating Uncertainty
The NSW infrastructure landscape is evolving. With declining expenditure and a looming workforce gap, the coming years pose both challenges and opportunities.
Let's Discuss!
What are your thoughts on these trends? How can we ensure a sustainable and well-equipped future for NSW infrastructure? Share your insights in the comments below!
The Good Source
As we gear up for the next financial year, researching trends in infrastructure pipeline and workforce capacity in NSW and Australia is crucial. Here are some of my favourite resources for staying informed:
NSW Government budget papers - Budget Paper No.3: Infrastructure Statement
Public Infrastructure Workforce Supply Dashboard by Infrastructure Australia
Australian Infrastructure Budget Monitor 2023-24 by Infrastructure Partnership Australia
Infrastructure Pipeline by Infrastructure Partnership Australia
These resources are a great starting point to identify key trends and make informed business decisions. Remember, there are many other valuable sources available.
This blog is intended to spark discussion, not provide definitive answers.
Commentaires