States 'fuel infrastructure investment'

Access says in its latest investment monitor the value of projects has risen by $19.2 billion over the June quarter and the amount is $37.3 billion higher than a year ago.

"In large part this surge in the value of definite projects stems from a surge in infrastructure spendings in the year's budget round," the independent forecaster said.

"Queensland in particular is leading the way in infrastructure spending this year, with New South Wales and Western Australia also displaying very strong infrastructure agendas."

Including the states' planned spending, the value of projects under consideration or possible is $332.6 billion, growing by $7 billion over the June quarter.

However, Access said the news wasn't as good in relation to new private sector projects, with just 46 new projects coming onto the market through the quarter, the lowest level in six years.

"In some cases a flattening out in investment activity may be driven by supply side constraints - a lack of skilled engineering and construction workers in remote parts of Australia," Access said.

"For other areas the high Australian dollar is becoming a significant factor potentially constraining local activity, and therefore the capacity to invest."

Mining and economic infrastructure continue to form the key areas of strength on the investment front.

"The strength we have seen in mining investment is no surprise given the record profits that mining companies are swimming in, providing them with the motivation and the cash for grand expansions.

"The sheer size and volume of many of the mining projects underway is soaking up much of the available capital and labour, driving up development costs and sowing the seeds for a slowdown in investment.

"That slowdown may still be sometime coming if growth in China's economy continues to surprise on the upside, at it is doing at present."

The federal government had also committed $22.3 billion for transport projects over the five years from 2009-10 under Auslink 2, which would ensure primarily road projects remain high on the agenda for a number of years, it said.

Access said Queensland had received the benefit of the lion's share of this road funding this year.

"That sees definite investment in Queensland rocketing, while in Western Australia it is really only a lack of available engineering and construction workers which is putting a brake on mining and infrastructure investment agenda there," it said.

It said investment in the Northern Territory was "taking a breather" between mega-projects, while in the ACT an office boom had led to a surge in investment.

In NSW, Victoria, South Australia and Tasmania there was also generally a strong infrastructure agenda, and momentum gathering in offices and retail space.