The industry is not expected to maintain its current momentum in the next five years, as downstream demand slows in two out of the three areas of construction activity.
Melbourne, Australia (PRWEB) November 02, 2013
The Railway Track Construction industry in Australia builds three kinds of rail networks: passenger transport, intermodal freight and mining output. In the past five years, the industry has grown strongly as downstream demand for these forms of transport has grown strongly. In the case of intermodal freight and passenger networks, expansion plans were already in place. Construction work for these kinds of rail networks relies on government funding. Governments are heavily involved in the downstream industries as owners and operators of track. According to IBISWorld industry analyst Caroline Finch, “the tipping point for the industry came in 2009, when, in response to the global financial crisis, the Federal Government announced a major package of infrastructure investment.” Large-scale passenger rail projects got green-lighted, as did investment in intermodal freight rail corridors.
The industry has absorbed this burst of activity and grown at a compound annual rate of 16.8%. In 2013-14, the industry is expected to decline by 6.3% as projects are wound up. Industry revenue, at a forecast $8.1 billion in 2013-14, remains close to a record high. The industry is not expected to maintain its current momentum in the next five years, as downstream demand slows in two out of the three areas of construction activity. As the Mining division moves towards a focus on production rather than investment, demand from this segment is expected to dwindle. “Further, new intermodal rail projects are expected to focus on the infrastructure for handling transport containers at either end of the rail journey, rather than the tracks themselves,” says Finch. As a result, the brightest area of the industry for the next five years is expected to be passenger railway construction. The industry has a medium level of market share concentration with four major players: Leighton Holdings Limited, UGL Limited AECOM Australia Holdings Pty Ltd and Downer EDI Limited.
The industry has a pipeline of ongoing passenger rail projects that will help tide it over during the coming five-year period. Work on new projects such as the North West Rail Link in Sydney is forecast to cushion the industry from declining demand in the next five years. Nevertheless, the Railway Track Construction industry is forecast to decline in the next five years. IBISWorld outlook forecasts are based on the assumption that large prospective passenger projects in Victoria and Queensland do not enter into construction over the next five years.
For more information, visit IBISWorld’s Railway Track Construction in Australia industry report page.
Follow IBISWorld on Twitter: http://twitter.com/#!/ibisworldau
IBISWorld industry Report Key Topics
Businesses in this industry construct railway tracks, with contractors specifically engaging in new work, reconstruction and repairs. It also includes construction management firms and special trade contractors that construct railway tracks and transit systems.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
About IBISWorld Inc.
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.