Renewable energy projects boost planned business investment
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The news: The total value of major engineering and construction projects, as measured by Deloitte Access Economics, remained flat over the September quarter but planned projects have hit a record high due to investments in solar, wind, battery storage and hydrogen projects.
The data shows that the weak Australian economy has started weighing on investments outside of these fast-growing industries.
The numbers: In the September quarter, $1.12 trillion worth of projects were recorded with new projects fully offset by those that completed or were cut from the database. Lower demand and higher costs were listed as the reasons for the sluggish result, as well as capacity constraints due to a shortage of workers.
However, there was a 20% lift over the past year in investment projects. The value of planned projects hit $617 billion in the September quarter, up $107 billion over the year. The growth in planned projects was 90% due to renewable energy projects.
An uptick in overall investment is expected in 2025-26.
What they said: “Although the near-term outlook for investment remains subdued, there are several longer-term opportunities for businesses. Significant investment will be required as Australia transitions toward net zero emissions," Deloitte Access Economics partner Stephen Smith said.
"The value of electricity supply projects has increased four-fold compared to just five years earlier, while demand for critical minerals and commodities such as hydrogen is already supporting new mining and manufacturing investment.
“Businesses are investing in a wave of new technologies to unlock productivity gains and safeguard their operations," he said, adding that the database lists $23 billion worth of data centre projects across Australia.
The source: Deloitte Access Economics Investment Monitor
