Fed: High oil prices pushing up infrastructure investment

AAP General News (Australia)
08-03-2005
Fed: High oil prices pushing up infrastructure investment

EDS PLEASE NOTE EMBARGOED TO 0001 AEST WEDNESDAY AUGUST 3



By Shane Wright, Economics Correspondent

CANBERRA, Aug 3 AAP - High oil prices are underpinning another surge in infrastructure
investment that could continue for years to come, a new report has found.

The Access Economics-Delta Electricity investment monitor found an 11.1 per cent increase
since March in the value of projects on the drawing board or under construction.

Access put the total value of projects being considered at $375 billion, of which $95
billion worth was under construction.

The total value of possible projects rose 20.9 per cent to $124.8 billion, while the
value of committed projects jumped 26.5 per cent to $31.4 billion.

The value of all projects is now 15.9 per cent up on where it was a year ago.

Access associate director David Rumbens said state governments had sunk money into
major infrastructure projects in recent months.

But it was the energy sector, driven by soaring oil prices, that looks set to keep
Australia's recent lift in infrastructure investment moving forward.

"Strong energy demand is firming plans for large LNG projects in Western Australia
and the Northern Territory," he said.

"While high oil prices hurt consumers at the bowser, Australia as a net energy exporter
gets some benefits through higher profits and investment.

"If prevailing conditions continue, it may well be energy developments that see a fourth
wide drive growth into the investment cycle into the future."

Access found the value of proposed infrastructure projects in Western Australia grew
15.1 per cent in the June quarter to more than $103 billion.

There was also a surge in Victoria (up 15.6 per cent to $79 billion), Queensland (up
14 per cent to $68.5 billion) and Tasmania (up eight per cent to $7.5 billion).

Infrastructure investment in both NSW and Victoria is being led by transport projects,
while mining-related activities are pushing work in Queensland and WA.

Access said growth in commercial building is easing as growth in the domestic economy
slows, partly due to the cool housing market.

AAP sw/jt/de

KEYWORD: INVESTMENT (EMBARGOED)

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