Research Briefing | Aug 3, 2023

Maintenance in Australia: 2023 Edition | Executive Summary

Australia’s maintenance market is estimated to have increased to $53.5bn in FY22, driven by road rehabilitation following flooding along the east coast of Australia. Road maintenance expenditure will continue to be supported over the near-term by Federal and State government programs. Mining maintenance spending will be buoyed by elevated commodity prices, and increased maintenance requirements on recently built LNG facilities.

Key points:

  • Maintenance Activity continues to be impacted by flood resilience and reconstruction: The Australian maintenance sector continues to benefit from federal funding. The 2022 23 Federal Budget announced an expansion and extension of the Local Roads and Community Infrastructure (LRCI) Program to $3bn. In early 2023 the Federal Government announced an additional $250mn for Phase 4 of the LRCI program, bringing the total to $3.25bn.
  • Risks remain around forecasts: Key risks to our forecasts include prolonged supply chain disruptions, capacity constraints, and the continued conflict between Russia and Ukraine. China continues to face a number of structural headwinds which are set to weigh on growth over the coming years. The government’s attempts to move to a consumption-led growth model are yet to show signs of success, and a falling population will make this transition more challenging. A slowdown in Chinese economic growth beyond what we anticipate will weigh on the outlook for Australian mining investment and subsequently impact mining maintenance activity.
  • Total maintenance expenditure is forecast to average $54.5bn over the five years to FY27, 9% higher than the average over the five years to FY22. The industrial super sector is forecast to be the biggest driver of growth in maintenance expenditure over the next five years, as activity is supported by increased maintenance requirements of recently completed major LNG facilities. Activity will also be supported by metal ore mining as elevated prices and the reopening of the Chinese economy drive demand, particularly for iron ore. 
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