Welcome to the Building Industry Bulletin

The quarterly building industry bulletin aims to provide updates on the latest trends within the Queensland building industry as relevant to the activities of the Department of Public Works.
NIEIR Queensland regional construction activity update

According to the latest update from the National Institute of Economic and Industry Research (NIEIR), the immediate short term outlook is one of continued growth for Queensland construction activity, albeit at a significantly reduced growth rate compared to the last few years.

The NIEIR projections have once again been revised upwards due to increases in dwelling construction figures, which reflect the expected mild nature of the dwelling cycle downturn. There has been almost no change in the projections for non-residential building and engineering construction expenditures. NIEIR projects total Queensland construction to grow by 6.8%in 2005-06 and 6.4% in 2006-07 compared to 4.5% and 6.0% respectively in the previous bulletin. NIEIR expects that the decline in dwelling construction activity over the next few quarters may ease the rate of growth in real construction costs. Skilled labour shortages are only slowly easing, according to NIEIR, with the level of skilled labour shortages estimated at 27,400 in September quarter 2005, only 3,000 less than the estimated shortages in September quarter 2004.
[ View quarterly report ] [View NIEIR Annual Report 2005]
DPW Contractor Survey

The results of the December quarter Contractor Survey indicate that the sub-contractor shortage is slowly easing, with a total of 55% of respondents reporting difficulties obtaining subcontractors. This is the lowest level reported since the survey began in June quarter 2004 when 65% of respondents reported difficulties. Consistent with the September quarter 2005 survey, the most acute shortages are still being reported in the Fitzroy region, with two thirds of respondents experiencing difficulties. There has been an increase in the proportion of respondents reporting difficulties employing sub-contractors in the areas of plumbing, plastering, carpentry and electrical. Reported shortages for wall and floor tiling, joinery, form working and steel fixing have significantly declined since the September survey. According to respondents, capacity, as at December 2005 was 86%, with just under half of the respondents indicating that their workloads would increase over the next three months. Areas where workloads are predicted to increase over the next three months include the Darling Downs, North West, Sunshine and Gold Coast regions. Building costs are expected to rise over the next three months in the Gold Coast, Northern and Mackay regions.
[ View the full report ]
PQC Tender Activity

Although there was only a small increase in the total number of projects that went to tender in December quarter 2005 the total value of work was more than three times the value accepted in the previous quarter. The pressure to attract tenderers continues with an average of 2.6 per project during the December quarter, the lowest average recorded since DPW began reporting this data in June quarter 2004.
[ View the table ] Building Price Movement Forecast

The Department of Public Works has forecast a 1-2% increase in building costs per quarter in the period to June 2007.
[ View the table ]

Building Materials Cost Comparison

There were no increases in the cost of any of the Queensland building materials monitored by DPW during December quarter 2005. According to Reed Construction Data the largest increases in material costs during the last 12 months have been in 200mm standard concrete blocks (12.68%), face bricks – settler range (10.39%) and 25mpa concrete (7.33%).
[ View the full table ]Building Policy/Legislation News (New)

Capital Works Management Framework Review (CWMF) Maintenance Management Framework Review (MMF)

The Building Policy Unit is currently undertaking a planned review of both the CWMF and MMF. The initial consultation phase has been conducted and the information gathered is currently being analysed. Issues papers presenting proposed enhancements to the CWMF and MMF will be developed shortly based on the analysis and are anticipated to be released to stakeholders in March 2006 for review and comment.

Policy Advice Notes (CWMF)

In an initative aimed at improving forecasting of building procurement costs, the Building Policy Unit is planning to release three new Policy Advice Notes shortly. These will cover allowances for escalation; cashflowing; and categories and use of estimates.

New legislation applicable to the building and construction industry

In September 2005, the Federal Parliament passed the Building and Construction Industry Improvement Act 2005 and associated legislation affecting the building and construction industry. The legislation incorporates key elements of the Australian Government's legislative response to the recommendations of the Royal Commission into the Building and Construction Industry. A Capital Works Management Framework Newsbrief has been published which highlights key features of the legislation. The News Brief can be located on the DPW Website at www.build.qld.gov.au/amps/AmpsDocs/CWMFNews_31.pdf

[ View the Newsbrief ]