Australia's construction activity to remain "extremely robust" - Jefferies

Reliance Worldwide

05/10/2022 22:55

** Jefferies says Australia's A$100 bln ($65.03 bln)
infrastructure pipeline will grow due to population growth and
renewable energy targets, even as constraints including rising
costs dampen construction activity
    ** Says construction firms BlueScope Steel  BSL.AX ,
Fletcher Building  FBU.NZ , James Hardie Industries  JHX.AX ,
CSR Ltd  CSR.AX , and Reliance Worldwide Corp  RWC.AX  are
likely to see volumes remain relatively robust in near-term 
    ** Jefferies expects pricing for BSL, FBU, JHX, CSR and RWC
to increase for some products in near-term that are exposed to
rising manufacturing costs  
    ** Expects construction firms Adbri Ltd  ABC.AX  and Boral
Ltd  BLD.AX  to see rising import parity pricing for cement due
to weaker AUD and rising clinker manufacturing cost 
    ** Sees a recovery in construction materials leveraged to
infrastructure spending for ABC and BLD
    ** Expects residential approvals to fall in FY22 and FY23;
says moderation in building activity remains muted as industry
continues to work through backlog 
    ** Expects Australia's concerns about declining future
building work and the prospect of slowing economic growth to
provide stimulus for future infrastructure spending
($1 = 1.5378 Australian dollars)
 (Reporting by Poonam Behura in Bengaluru)
 ((Poonam.Behura@thomsonreuters.com;))