According to a civil construction report from BIS Shrapnel, WA and Queensland will account for 94% of the total decline in resources construction.
Despite the drop-off BIS infrastructure and mining manager Adrian Hart said activity could rebound once conditions improved.
“Coal and other mining-related construction has already fallen sharply and there are more falls to come as current greenfield and brownfield projects move into completion,” he said.
“But activity will remain at high levels in historical terms given the need to sustain higher levels of production.
“Later, as global economic conditions improve and the Australian dollar eases lower, we expect that many of the projects deferred over the past few years will come back into the reckoning.”
Hart said while growth in China was moderating it would still support some growth, with demand for minerals and energy also rising elsewhere in the Pacific basin.
“This is certainly not the end for mining investment in Australia,” he said.
“It has always been a cyclical industry and we anticipate further cycles will play out over the coming decade, although perhaps not as large as the most recent boom.”
The report says total construction work will fall marginally to $127 billion in 2013-14, sliding a further 11% next year and seeing further losses until 2017-18 activity levels are 25% lower than last year’s peak.
Hart said an unsustainable 37% rise in oil and gas construction had also skewed the figures.
“Excluding the boom in oil and gas construction, engineering construction work will fall around 12% through 2013-14, with another decline of 15% in 2014-15,” he said.
“In our view, this is a more realistic approximation of current domestic engineering construction conditions given that up to 70% of the total value of the large LNG projects is tied up in offshore fabrication and other costs.”
BIS said while strong at the moment the oil and gas work was set for a “bust” from 2015-16.
It said a key driver of the wider downturn had been a dearth in new public and private sector projects as commodity prices fell.
Looking forward BIS said telecommunications and transport projects offered the best prospects over the next five years, with new activity hinging on cooperation between state and federal governments.
“While there is a temptation to think so, it’s not all bad news out there and the smarter companies in this space are keeping track of the opportunities subsector by subsector,” Hart said.
