The civil construction sector will be relatively unaffected by the current economic downturn - particularly in comparison with the residential and non-residential building sectors - according to the latest forecasts from the Australian Construction Industry Forum's Construction Forecasting Council (CFC).

The CFC's June forecasts indicate that most subsectors of engineering construction, including mining, road construction, bridges, rail and ports, electricity generation, water and sewerage and telecoms, will show modest or even significant growth in spending over the next few years.

Despite the boom in mining activity which Australia has experienced over the past few years, mining infrastructure activity is expected to decline significantly over the next four years, with mining construction forecast to be down by more that half in 2010/11.

Non-residential building has been particularly badly affected, declining by at least 50 per cent and approvals have fallen further in the March quarter of 2009. Government funded sub-sectors such as education and health, however, have not experienced such declines. In fact, these two sectors will show an average growth of approximately 10 per cent a year over the next five years.

Engineering construction has received a solid boost from Budget announcements around electricity, roads, rail and the National Broadband Network, which should prevent a collapse of the sector before the next economic upswing.

"Road and rail construction in particular will see increased levels of activity as a result of the Rudd government's infrastructure spending," said Peter Barda, executive director of the Australian Construction Industry Forum (ACIF).

"In the telecommunications sector, we have the rollout of the federal government's $43 billion National Broadband Network, which will generate significant levels of work for contractors."

Civil contractors working in the building sector, in site preparation works for example, will experience a significant drop in activity levels over the next few years.

"In private sector non-residential building, which includes offices, industrial developments, and retail and wholesale construction, the outlook is very bleak for at least the medium term," Barda explained.

Once again, the education and health sectors are the only government-funded subsectors showing any prospects for growth.

In the residential sector, while growth is flat at the moment, there is substantial demand, particularly for single dwellings. Rising unemployment will hold back a recovery even with very low interest rates, however, the ACIF is expecting that a significant turn-around will take place in approximately 12 months, and activity is expected to rebound strongly by 35 per cent in 2010/11.