Approval for the $43 billion Gorgon gas fields coupled with Western Australia's $116 billion suite of other definite investment projects is more than double that of any other state, according to leading forecaster Access Economics.
Approval for the $43 billion Gorgon gas fields coupled with Western Australia's $116 billion suite of other definite investment projects is more than double that of any other state, according to leading forecaster Access Economics.
The September issue of Access Economics-Arup Investment Monitor, released today, reveals another surge in the value of projects either underway or committed to start soon in Australia, with WA leading the way.
As at end September 2009 Investment Monitor recorded $273.3 billion of definite investment projects, an increase of $34.8 billion from a year earlier and an increase of $46 billion over the past quarter.
Access Economics director David Rumbens said that latter figure is pretty much represented by the $43 billion Gorgon liquefied natural gas project.
"In terms of investment that is a massive amount of dollars - more than the full amount of private sector engineering construction spending in 2008-09 and more than double the private engineering construction spend from four years ago," he said today.
"However, while business confidence is rebounding it has not yet translated into a broadly based lift in investment intentions.
"During the September quarter there were just nine new projects in the Investment Monitor database."
The prospect of developing the Gorgon gas fields for LNG production was first mooted in 1994 and had simply remained under consideration for the past 15 years.
"Could there have been a better moment for the Australian economy for this project to actually be delivered?" Mr Rumbens said.
"Skating through the worst global downturn since the 1930s we now have a private consortium willing to invest $43 billion into the Australian economy for the one project."
According to Access Economics, the Gorgon project offers "renewed reasons for optimism" following a declining number of new projects in Australia in recent years.
"In part that is because profits are down only 20 per cent - Access Economics had feared the downswing could result in a greater savaging of profits," Mr Rumbens said.
"The federal stimulus spending has been large, particularly for schools, but also for some transport projects, and most importantly, China is once again growing at a fast pace though there are some question marks over the sustainability of the pace of China's recent commodity buying."
Investment Monitor also revealed that while WA was a driving force of in investment projects, Queensland is next strongest, though there the engineering pipeline is weakening.
Engineering construction activity jumped in Queensland during the commodity boom, but is now softening relatively rapidly despite the best efforts of the state government to keep projects rolling.
Current investment is dominated by water- and transport-related projects, including the $1.9 billion duplication of the Gateway Bridge in Brisbane, due to be completed in 2010, the $3.4 billion Airport Link tunnel project and the $3 billion North South Bypass Tunnel development, also in Brisbane.
Both New South Wales and Victoria are showing a solid investment profile but with non-residential building work waning in both states as white collar employment has stuttered, Investment Monitor found.
But Western Australia is clearly the standout state for its investment agenda at present, with the Gorgon project expected to generate some 10,000 jobs at the peak of construction.
Work is due to get underway next year, with the first gas to be exported in 2014.
WA has been viewed as the nation's engineering heartland over the past few years, with projects currently underway including other major gas projects such as the $11.2 billion Pluto gas development in the North West Shelf, and the $5 billion North Rankin development nearby.
The $2.5 billion expansion of the Worsley Alumina refinery in Collie is another notable mining project, as well as the $1.7 billion stage 3 development of Rio Tinto's Argyle diamond mine near Kununurra.
Further boosting WA's investment prowess is the "healthy" non-residential sector, despite approvals falling sharply.
Work includes the new $1.8 billion Fiona Stanley Hospital, due to be completed by 2013, a new $470 million multi-purpose indoor entertainment and sports complex in Perth, as well as the nearly-completed $425 million Saracen Properties retail and office development at Raine Square in Perth.
