Q4 2023 Australia Report [Adelaide]: The South Australian economy continued to grow in the quarter, however tighter financial conditions, cost of living pressures and high energy prices are all anticipated to continue to influence the overall TPI forecasts in 2024.
The South Australian and Federal Government remain committed to providing new opportunities into the SA market with healthcare, education, defence, and road infrastructure projects forming a large part of the current investment.
The State economy continues to operate at near capacity, with unemployment at low levels. Private spending has turned down, but business investment and household consumption have remained resilient so far. Supply chain issues have improved but energy costs increases are starting to impact this, however, shortages of skilled labour and increasing wage costs associated with strong industry demand and recently signed agreements along with increased margins will continue to place pressure on prices.
High levels of interest rates are also likely to provide further restrictions on the commencement of future projects, particularly in the residential sector.
Private spending has turned down, but business investment and household consumption have remained resilient so far.
Escalation insights
Labour shortages and wage increases (including EBA negotiations) continue to be a major factor in continuing to place upward pressure on both project costs and program delays. Material costs appear to be more predictable with supply chain improvements, however energy input costs are likely to maintain pressure on material costs moving forward into 2024.
Energy input costs are likely to maintain pressure on material costs moving forward into 2024.
Photo: New contemporary multipurpose centre at Carrick Hill, Adelaide
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