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Australia is a country that’s heavily investing in infrastructure in a variety of different areas. Some experts have put the current project list at a total of $1 trillion! Some ASX shares are involved.
That figure includes spending on different areas like renewable energy, roads, railways, sewers, telecommunication towers and so on.
How much is being spent on infrastructure and where?
The Australian has reported on research by Deloitte that the value of projects had increased by $16.3 billion to $945.6 billion, which was up 1.8% from the previous three months.
The newspaper has reported that many state governments, particularly Victoria, are investing heavily in transportation projects, with the transport industry accounting for 60% of the increase in definite activity from late 2020 to mid-2023.
Deloitte Access Economics partner and report lead author Stephen Smith said delays had meant that some projects are now only just starting:
Capacity constraints in the construction sector have meant some projects commissioned back when the economy was on more solid footing are only now starting construction or catching up to earlier work schedules. This is contributing to the current strong gains in both engineering and non-residential construction.
The energy transition is also driving investment. Construction has commenced at several solar, wind and battery projects in 2023. Further increases in renewable investment are expected as ageing coal-fired power stations are replaced and Australia seeks to meet emissions reduction targets.
These renewable energy projects are also increasing demand for the raw materials supplied by the mining industry, particularly critical minerals used to make batteries such as nickel, lithium, cobalt and manganese.
Which ASX shares are involved?
In terms of roads, the most obvious example would be the toll road business Transurban Group (ASX: TCL) which owns tolls roads and is heavily involved in developing new roads in the eastern Australian states including the West Gate Tunnel project in Melbourne
Lendlease Group (ASX: LLC) is an ASX share that’s involved with developing projects in Australia (and globally). For example, it is a key business involved in the delivery of the Barangaroo precinct in Sydney.
APA Group (ASX: APA) is one of the largest energy infrastructure businesses around. Not only is it adding to its large gas pipeline around Australia, but it’s also investing in renewable energy, as well as exploring the potential to transport hydrogen in its pipelines. It’s aiming to be the partner of choice in electricity transmission.
Energy giants AGL Energy Ltd (ASX: AGL) and Origin Energy Ltd (ASX: ORG) have both committed to investing a lot in renewable energy (and batteries) to support the energy transition.
For telecommunication towers, it’s obvious to say that Telstra Group Ltd (ASX: TLS) and TPG Telecom Ltd (ASX: TPG) are heavily investing in their 5G network infrastructure so that they can enable mobile users to get access to the fastest speeds.
Service Stream Ltd (ASX: SSM) is a smaller business, but its business is all about providing services to the telecommunications, utility and transport sectors.
There are also some ASX shares involved in data centres and building the digital infrastructure for the economy, such as Nextdc Ltd (ASX: NXT) and Macquarie Technology Group Ltd (ASX: MAQ).