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Highlights

  • Capital expenditure on buildings and structures in 2023-24 is estimated to hit AUD 88 billion, an upward revision of 6.4% from the previous estimate
  • Australian Government in its federal budget 2023-24 provided AUD 200 million funding for the Thriving Suburbs Program dedicated towards the investment in community infrastructure
  • Johns Lyng Group Limited (ASX: JLG), an ASX-listed integrated building services company, could also benefit from a recovery in the construction space.

As per the data published by ABS on 22 June 2023, employment in the construction sector witnessed an 11% increase year-on-year to 1,322k for the three months ended May 2023. Meanwhile, capital expenditure on buildings and structures in 2023-24 is estimated to hit AUD 88 billion, an upward revision of 6.4% from the previous estimate.

It is Worth mentioning that the Australian Government in its federal budget 2023-24 provided AUD 200 million in funding for the Thriving Suburbs Program dedicated to the investment in community infrastructure. The total value of engineering work done increased by 5.3% QoQ and 14.9% in March 2023 quarter, supporting a recovery in the infrastructure space.

Also, in the March quarter, the total number of residential dwellings advanced by 52k units to 11.02 million and the average price of residential houses edged up by AUD 8.5k and stood at AUD 896k. These factors bode well for companies in the construction space.

Johns Lyng Group Limited (ASX: JLG), an ASX-listed integrated building services company that operates in building and restoration services across Australia and the United States, could also benefit from a recovery in the construction space.

The company reported a 71.2% jump in its revenue from ordinary activities at AUD 635.6 million in 1HFY23 ending 31 December 2022. Meanwhile, its net profit after tax from ordinary activities increased by 115.5% annually to AUD 25.2 million. Strategic acquisitions along with contract wins supported the growth in top-line and bottom-line. Here's a look at its key financial metrics below:

JLG Share Price Performance

JLG shares closed 1.747% higher at AUD 5.240 on Monday (26 June 2023). The stock has witnessed a dip of 18.89% in the last one month, and in the previous three months, it has corrected by around 15.21%. The stock has a 52-week low and 52-week high of AUD 4.940 and AUD 7.990, respectively and is currently trading below the 52-week high-low average. 

Note 1: Past performance is neither an Indicator nor a guarantee of future performance. 

Note 2: The reference date for all price data, currency, is 26 June 2023. The reference data in this report has been partly sourced from REFINITIV.