The number and scale of major construction projects in Queensland will fall by more than $7.5 billion over the next four years, a new report shows.
The 2013 Major Projects Report has found the amount of construction work on major projects will fall from an all-time high of $18.5 billion in 2012-13 to $10.9 billion in 2016-17.
Major projects are those with a total cost of $100 million or greater.
The report was prepared by BIS Shrapnel for the Queensland Major Contractors Association (QMCA) and Construction Skills Queensland.
QMCA president Tony Hackett said the forecast highlighted serious challenges ahead for the industry.
"A decline of around 40 per cent is a serious investment challenge on the medium-term horizon," he said in a statement.
Mr Hackett said there was unprecedented uncertainty about projects coming to fruition given declining productivity levels, skilled labour issues, fluctuating commodity prices and declining public investment in large infrastructure projects.
"Importantly the report finds that the total volume of work over the forecast period has remained relatively unchanged," he said.
"But acute uncertainty now surrounds the timing of a significant number of new projects, with many pushed back and a large number remaining unfunded."
He said the forecast was concerning given the importance of construction to the Queensland economy.
The report says global economic turbulence will continue to factor heavily in investment decisions.
It notes escalating costs and falling commodity prices have combined to undermine the competitiveness and financial feasibility of the next round of projects.
In particular, labour costs have grown substantially in Queensland over the past decade.
In 2003, the state had construction wages 4.3 per cent lower than the national average but the forecast says they are likely to be 8.6 per cent higher by 2017.
The report warns savings pushes by the federal and state governments will particularly affect the roads and bridges sector.
Construction Skills Queensland chief executive Brett Schimming said targeted training programs would be essential to ensure the industry had the skilled labour it needed.
He said the report showed major project work would remain at record levels through 2013 and 2014.
And the report did not look at projects under $100 million and reconstruction work, which would put additional pressure on the skilled labour pool.
"We need to ensure we have the right skills in the right place at the right time," he said.
"The regional focus of many mining and energy projects will continue to create challenges for the construction industry."