It forecasts a 14.7 per cent rise in the total value of engineering and commercial construction this year, driven by oil and gas processing and heavy industrial projects.

Released today by the Australian Industry Group and Australian Constructors Association (ACA), the construction outlook survey also predicts a further rise of 13.8 per cent in 2013.

Engineering construction turnover is set to rise by 17.1 per cent this year and 15.4 in the next, while the total value of commercial construction is expected to rise by 6.1 per cent and then 7.2.

However, this growth could be offset by an expected continuance of skill shortages.

Around 70 per cent of businesses predict they’ll find it difficult to hire skilled staff over the next six months.

Australian Industry Group chief executive Innes Willox said that engineering construction in the mining sector is “bursting at the seams, with skill shortages widely anticipated and rising expectations of shortages of raw materials and equipment.”

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Professor Warwick McKibbin also told The Wall Street Journal that he thinks the Labor government should give up its aspiration to deliver a budget surplus of $1.5bn.

He claimed the best the government can do under current circumstances is to improve on its previous deficit of more than $44bn.

Prime minister Julia Gillard had previously promised a surplus that would give the RBA more freedom to implement easing measures by reducing the country’s interest rate, which was reduced by 50 basis points this month to 3.75 per cent.

Treasury secretary Martin Parkinson described the surplus plan as a fiscal consolidation that “is happening in a far healthier economic environment than the circumstances facing many other advanced economies at present.”

However the AUBJ has previously reported how the business community was frustrated by the budget, which failed to provide the tax breaks previously considered for companies to help them expand.

McKibbin said the planned surplus was “badly timed because it is a massive fiscal consolidation” and added that consolidating while Europe’s fate hangs in the balance will lead to growth cutbacks in Australia of up to one per cent.

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Chairman Jacques Nasser said BHP is cutting back in reaction to declining commodity prices as uncertainty grows in the Australian mining sector and global economic climate.

“We should pause, take a deep breath and wait and see where the pieces fall around the world,” he said today at a business lunch in Sydney.

“The tail winds of high commodity prices have contributed to record growth in the sector. Now we have a period where those tail winds are moderating and we expect further easing over time.”

He added that Australia was becoming one of the higher-cost countries in which to do business and said its policies on industrial relations and tax should provide better support for investment.

“What we have in Australia is not a perfect system and on a global basis we are at the upper end of overall taxation levels,” Nasser said.

“That means we are not competitive – however, what matters more at this point in time is stability.”

“If Australia doesn’t get both of these policy levers right – industrial relations and taxation – we will not drive improvements in economic prosperity that we should expect of our country.”

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They argue that seismic blasts used in offshore exploration disrupt marine life and that the risk of an oil spill is too great for this sensitive environment.

Such exploration has already received the government’s permission, with federal resources minister Martin Ferguson announcing 27 areas in waters north of Melville and Croker Islands, including the Arafura and Money Shoal basins near Darwin, as exploration release areas.

Australian marine conservation society spokesman Jess Abrahams said: “We have seen impacts of seismic testing not just on marine mammals like whales but also on fish and other marine life.

“One oil spill in the Arafura Canyon would be devastating for commercial fishers and other marine biodiversity more generally.

“It is crazy to be offering areas for exploration directly adjacent to areas that are considered worthy of marine protection,” he continued.

“There is enough oil and gas across northern Australia already. Some areas are too precious and the Arafura Canyon and Money Shoal basin are some of those.”

Speaking to ABC News, both the Seafood Council in the Northern Territory and a commercial fisherman owning fishing licences covering 7,000km2 said seismic blasts scare fish away and damage fishing for up to 18 months afterwards.

However the Australian Petroleum Production and Exploration Association claims there is no evidence that seismic blasting has an effect on fish stocks.

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The consortium will buy a 10 per cent stake in the Chevron-operated Wheatstone gas fields development and an eight per cent stake in the LNG project.

Companies involved include Mitsubishi Corp, Nippon Yusen and Tokyo Electric Power (TEPCO), which had previously planned to buy 15 per cent of Wheatstone before the TEPCO-operated Fukushima nuclear plant was destroyed in last year’s tsunami.

TEPCO was pushed close to bankruptcy by the disaster, but bailed out last week with 1 trillion yen from the Japanese government.

All 50 of Japan’s nuclear reactors were switched off last year amid safety fears and the country is now the world’s biggest LNG importer, as well as a major customer to the Australian LNG sector.

The Wheatstone LNG project is scheduled to start producing 8.9 million tonnes of LNG annually from 2016.

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The leak was found in a 1,000-litre nitric acid container on board a German-registered, 34,600-tonne Califiornia Senator ship from Fremantle, docked in the port.

After the ship’s captain called ahead to warn authorities, firefighters boarded the ship at about 1am (AEST) to empty the drum and contain the leak.

A 250m exclusion zone was set up around the ship as fire crews checked other drums for holes.

Superintendant Ian Krimmer from Fire and Rescue NSW told AAP: “One ruptured container inside was located.

“Contents have all been emptied products have been removed by a contractor. The area has now been neutralised and made safe.”

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The bid trumps another made by pipeline owner APA Group, which has already accumulated 20.7 per cent of the fund.

Colin Atkin, Hastings Diversified chief executive, told Dow Jones Newswires: “It’s a reflection on how valuable the business is. It’s quite a good premium to what’s in the market at the moment.”

Hastings Funds Management said today that Pipeline Partners’ bid stood at $2.35 per security and has rejected APA’s bid.

Alan Cameroon, chairman of the Hastings Diversified board, said: “HDF remains focused on optimising value for security holders and will continue to act in the best interest of its security holder statement.”

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This is in spite of tough trading conditions, which the company attributed partly to this year’s weather being less hot than usual, making cold carbonated drinks less appealing.

At CCA’s annual general meeting in Sydney today, group managing director Terry Davis told shareholders: “CCA expects to generate around four to five per cent growth in net profit for the first half of 2012, before significant items.

“The group operating performance in the year to date has been solid given the headwinds the business has faced, particularly given the impact of the cool and wet summer across the eastern seaboard of Australia.”

Although promising, the growth predicted for 2012’s first half is less than that recorded for the equivalent period in 2011, where profit after tax before significant items grew 5.5 per cent.

Davis also said he anticipated the central bank’s 0.5 percentage point cut to the official cash rate would improve consumer confidence and spending.

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Its fall has been attributed to the austerity measures the government is enforcing in order to return a budget surplus at the end of the year.

Gerry Harvey, chairman of Australian retailer Harvey Norman, told AAP he was not worried by this decrease in value as he doubted it would affect import prices.

“I don’t think prices will go up,” he said. “The bloke who’s making it, wherever he’s making it, I think they are bearing the brunt [of the weaker Australian dollar].”

He added that low consumer demand for electrical goods will ensure prices for these imports continue to fall.

Meanwhile, Flight Centre spokesman Haydn Long told AAP that prices for overseas hotels, holidays and package deals would not be immediately affected.

“It’s really only relevant if you are going to the United States,” he said, adding that even then higher prices are offset by airfare prices lower than they were five years ago.

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Shell’s Australia chairperson Ann Pickard told an oil and gas conference on Monday that its Arrow LNG project will sell its initial “ramp up” gas to other gas users in the area until the plant was built and ready to receive gas.

She added that the Arrow LNG project’s costs have remained roughly constant since Shell took it over around two years ago – unlike other LNG schemes that have been susceptible to huge cost blowouts.

“Our costs have remained pretty much the same since we took it over… we don’t see any increase,” Pickard said.

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