BIS Shrapnel  have predicted a significant decline in total engineering construction, despite Federal Government efforts to counter the global financial crisis and associated economic downturn through an infrastructure-led economic stimulus. While the company's 2008/09–2022/23 report, Engineering Construction in Australia, predicted an increase in Federally-funded work, falling activity from other levels of government and a considerable drop in privately-funded work will counteract this.

BIS Shrapnel are estimating that by 2010/11, engineering construction activity will have decreased by 20%, which when taking into account the rate of inflation, equates to almost $14 billion. This decline will come mostly from privately-funded work and is expected to be led by the mining industry.

According to Damon Roast, a BIS Shrapnel economist, the engineering construction industry has still progressed in 2008/09, and the continued growth for this year is due to the long lead times for many projects. He said that because the majority of the work now in progress was proposed during more favourable economic times, growth over 2008/09 is expected to be about 17%. 

Roast suggests that there will be a 30% decline in privately-funded work 2010/11, and the situation is unlikely to improve until the economic crisis is resolved. Federal Government funding will provide some assistance, but it is unlikely to halt a significant reduction in construction activity.

BIS Shrapnel expect that the engineering construction sector will begin to re-emerge from 2012/13, provided that the recession comes to an end.

BIS Shrapnel forecast by state

New South Wales: After a prosperous period over 2008/9, activity in New South Wales will fall 15% until 2011/12. Mining, electricity, and water will be profitable investments. Victoria: A need for work in Victoria is expected to increase engineering construction activity, with road and rail works being fast-tracked and the commencement of water, sewerage and electricity projects likely.  

Queensland: Queensland are expected to see a 30% decrease in engineering construction activity until 2011/12. Mine projects will experience less demand for minerals and the impact of the end of several long-running projects will be significant.

South Australia: Important projects in water, sewerage, electricity and the Northern Expressway will support the state, before the commencement of the Olympic Dam expansion from 2011. South Australia has a positive outlook.

Western Australia: Western Australia is set to experience some of the toughest times as commodities weaken, despite the continuance of several key minerals and energy projects. Engineering construction activity is predicted to fall by 35% over the next three years.

Tasmania: A decline of 20% in engineering construction activity is set take place over the next three years, prompted by the conclusion of several electricity projects.

Northern Territory: Activity in the Northern Territory is lead by major resources projects. The conclusion of the Gove alumina refinery expansion will decrease engineering construction activity, before the beginning of the Ichthys LNG plant from 2011/12.

Australian Capital Territory: The outlook for the Australian Capital Territory is positive. water supply and electricity investments will lead the activity, which will be continued in the early 2010s by road and telecommunications projects.