Welcome to Lion Gate Pty Limited
Construction & Engineering
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Overview
A fast-changing world offers many opportunities. It also comes with great uncertainty and challenges that develop our abilities and test our ambitions, perspectives and determination. This determination translates into one goal: to generate long-term sustainable investment returns for our clients, based on a unique sustainability-driven philosophy.
We have been committed to sustainability since 2002 and have continued to strengthen our ambition, our investment philosophy and our management processes to take ESG considerations into account and promote a low carbon, environmentally sustainable and inclusive economy.
We believe it takes all of us to be a key driver of the shift to positive investing. Only a company where people work together can embrace this changing world. At BNP Paribas Asset Management, we are the sum of our people – a group of interesting individuals with different backgrounds and cultures – and we expect companies we work with to aim for the same standards.
The construction industry in Australia registered an annual growth of 1.8% in real terms last year, compared to a decline of 2.1% in 2020. The industry's growth in 2021 was supported by an expansion in both building construction activities and civil engineering works.
Although the industry recorded growth last year, its output remained marginally below its pre-pandemic levels in 2019. Tightened restrictions, including the temporary suspension of construction activity and workforce capacity limits in Victoria and New South Wales (NSW), weighed on construction output last year.
Forecast-period growth in the industry will also be supported by investments in the housing, renewable energy, manufacturing and healthcare sectors, in order to deliver on the election promises made by the incoming Prime Minister Anthony Albanese.
Investment Process
Our investment processes, which embed sustainability, use quantitative and fundamental research to help our portfolio managers generate alpha. Our solutions combine these capabilities in order to answer our clients’ requirements with the most relevant offer. To achieve this we manage assets across the globe by keeping an open mind and by staying true to our convictions. Our experts around the world constantly investigate secular trends and sustainability shifts, supported by in-depth fundamental investment analysis and proprietary ESG scoring, while our robust risk framework combined with our quantitative techniques leads to better investment and asset allocation decisions.
Overview
The construction industry in Australia is expected to contract by 2.6% in real terms this year, following a marginal annual growth of 0.6% in 2022. The industry’s growth in 2023 will be affected by elevated inflation, rising interest rates, soaring construction costs, and a sustained fall in new building permits. According to the Australian Bureau of Statistics (ABS), the total value of buildings approved in the country, in real seasonally adjusted terms, declined by 10.1% in 2022. Supply chain disruptions, labor shortages and the continued weakness in the country’s residential construction sector will also impact the construction industry’s growth in 2023. These headwinds are expected to affect the functioning of several construction companies in Australia, thereby leaving certain projects in jeopardy. In early March 2023, the Australian Securities & Investments Commission (ASIC) reported that 1,236 companies in the construction sector have gone into liquidation, receivership, or administration, since July 2022. This compares to a total of 1,284 companies in overall Financial Year (FY) 2021-22 (July 2021 to June 2022).
he industry is however expected to record an average annual growth of 3.1% from 2024 to 2027, supported by the government’s continued focus on infrastructure development. The Albanese government released its federal budget for FY2022-23 in late October 2022. The budget includes an allocation of AUD9.6 billion ($6.6 billion) for vital infrastructure projects across the country, over the next four years, with over AUD120 billion ($83.1 billion) allocated for transport infrastructure projects over the next 10 years. In another positive development, the Department of Industry, Science, Energy and Resources unveiled its ‘Resources and Energy Major Projects – 2022’ report in December 2022. According to the report. the country had 423 resource and energy projects in the pipeline, as of 31st October 2022. This includes 118 projects worth AUD224-267.3 billion ($155.1-185.1 billion) in the publicly announced stage, 192 projects worth AUD251.5-340.8 billion ($174.2-236 billion) in the feasibility stage, and 83 projects worth AUD83.1 billion ($57.6 billion) in the committed stage.
The industrial construction sector will be supported by improvement in mining, manufacturing, and export activities, coupled with the government’s focus on strengthening the manufacturing sector and correcting vulnerabilities in its supply chains.
