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Business ready for three-year investment surge but delays create a 'pandemic tax'

Business

A Deloitte report has predicted three years of significant, nation-wide business investment with infrastructure spending expected to peak this year.

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The value of publicly funded infrastructure would hit $310 billion nationally this year, according to the Deloitte report.

But it said there was a “pandemic tax” from the uncertainty and delays caused by Covid-19 and significant issues around the failure of workers to return to offices which would have implications for transport.

“The longer that the Covid disruptions continue, the greater the chance that some changes – such as working from home – will prove permanent with implications for office demand in particular,” the report said.

Deloitte partner and report author Steve Smith said this was a 50 per cent increase from current levels and almost 150 per cent increase from the levels seen during the trough in 2015.

“The rapid growth is almost entirely down to the transport industry with the value of transport projects set to surpass a quarter of a trillion dollars over the coming years, up from a low of less than $50 billion in 2014,’’ Smith said.

He said overall business investment would grow in 2022 and accelerate in 2023-24, adding as much as 2 per cent to GDP. Deloitte also said its data base had projects listed worth $846 billion in various stages of approval and development. 

In Queensland, the value of engineering work fell by 4.3 per cent in 2021 with declines in mining and telecommunications the main factors.

The report claims about $155 billion worth of projects in Queensland were either in the committed, under construction, under consideration and possible categories. About $68 billion of investment in the state was currently under consideration.

About $39 billion worth of construction is underway in Queensland. Rail projects such as Cross River Rail, the 75 new-generation passenger trains and the third stage of the Gold Coast light rail account for $14 billion.

Deloitte said there were another $9 billion worth of committed projects waiting to start and half of this level was in the electricity sector. That included the $2 billion McIntyre Wind Farm which is expected to get underway this year.

Commercial construction fell by 6 per cent last year, but commencements grew and there was $9 billion worth of commercial construction in progress in Queensland and $13 billion in planning.

About $4 billion worth of the planned projects was in accommodation and there was another $2 billion in office developments including 200 Turbot St, 205 North Quay, 60 Queen St and 19 Eagle Terrace.

Smith said the pandemic was far from over and there would be continued impacts

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