Industry Trend Analysis - Agricultural Infrastructure To Come Into Focus - JULY 2017

BMI View: Agriculture-related infrastructure investment will come into focus in Australia over the next 10 years and beyond as robust growth in the country ' s agricultural sector runs up against limited capacity in the existing transport network.

Agriculture will become an increasingly important driver of growth in Australia's infrastructure sector over the next 10 years, as rising production and exports run up against capacity and logistics constraints in existing transport networks. Although agriculture-related projects are unlikely to approach the scale of mining and real estate projects that have historically dominated the Australian construction industry, we note that the long-term outlook for agricultural commodities is more positive than for minerals or housing. Our Commodities Team forecasts that wheat prices will trend upward 35% by 2021, while iron ore prices will decline by 27% over the same period. They also forecasts wheat production in Australia to grow at an annual average of 4.2% between 2016/17 and 2020/21, as exports to Asia expand ( see our Agribusiness coverage ' Bright Export Outlook For Australia But Growing Challenges ' , October 8 2015).

Existing Infrastructure Inadequate

Agri Outlook Positive
Global - Forecast Wheat and Iron Ore Prices
e/f = BMI estimate/forecast. Source: Bloomberg, BMI

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