PERTH (miningweekly.com) – Engineering construction work in Australia has fallen to its lowest levels since 2010, as resources investment continues to slide, advisory firm Deloitte Access Economics reports in its latest Investment Monitor.

The Investment Monitor contains details of more than 1 000 Australian investment projects valued at A$20-million or more, with the total value of projects currently recorded at A$810.9-billion, a 1.4% decline from the previous quarter.

Deloitte has warned that further declines in engineering construction are expected as the construction of major gas projects around Australia came to an end.

Quoting data from the Australian Bureau of Statistics, Deloitte stated in the report, published on Monday, that mining investment in 2016/17 would be smaller than previously expected, and while spending was expected to decline by about A$30-billion in the current financial year, it was still an improvement on the previous outlook for 2016/17.

“This should come as no surprise. On the one hand, commodity prices have lifted while on the other hand interest rates remain at record lows and the Australian dollar is off the heights reached in 2012/13. That economic backdrop says that the return on investment is rising at the same time as the cost of investment is falling.

“So, although investment is expected to continue sliding over the coming year, the worst of the falls have already occurred,” the report said.

However, Deloitte believed that further investment into commodities was unlikely, as the higher commodity prices of 2016 were temporary. The main driver of the higher commodity prices of 2016 has been the re-acceleration of China’s construction sector and the willingness of the country to absorb losses at State-owned steel mills rather than shutting them.

Despite the rebound in iron-ore prices, investment in the sector is likely to be sparse, with Deloitte noting that not a single iron-ore project is currently under construction.

The pipeline beyond was busting with some A$21-billion in projects under consideration and a further A$28-billion classified as possible; however, most of these projects did not have an announced start-date, and the likelihood of the majority of these being developed soon remained remote.

Coking and thermal coal were likely to share the same fate, while the outlook for gas investment also remains bleak.

Deloitte noted that despite the fact that over A$170-billion worth of gas projects were still under construction, all of these were scheduled to be completed by the end of 2017.