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

The latest update from the National Institute of Economic and Industry Research (NIEIR) shows that total Queensland construction activity is estimated to have grown by 9.2% in 2005-06. During 2005-06 this activity remained stable with around $6.5 billion work undertaken per quarter. The projected growth for Queensland construction in 2006-07 is 7.5% followed by an estimated 7% growth in 2007-08. The main driver of construction activity in Queensland during 2005-06 was engineering construction which represented 60% of the total growth in activity. This is compared to non-residential and residential building which represented 29% and 11% of growth in total activity respectively. This trend is expected to continue into 2006-07 with engineering expenditures expected to represent 80% of total growth, non-residential building a similar contribution to 2005-06 and dwelling construction a small negative contribution to total growth. According to NIEIR, after years of making small contributions to total Queensland construction activity, the public sector in now playing an important role in driving growth. In 2005-06 the public sector represented approximately one fifth of construction activity growth and this is projected to increase to almost 40% in 2006-07. NIEIR estimates that the skilled labour shortage reached 34,000 persons in 2005-06 and although increases in engineering and non-residential building activity are forecast through to 2009, it is anticipated that labour shortages will remain at current levels due to the continued inflow of workers from NSW and Victoria.  As a result of this NIEIR advises that capacity constraints will continue and the growth in total construction costs is forecast to remain between 1.5% and 2% per annum until an expected economic decline post 2009.
[ View quarterly report ] [View NIEIR Annual Report 2006]
DPW Contractor Survey

According to the results of the June quarter Contractor Survey, the improvement being noted in subcontractor availability in the March quarter appears to have levelled off, with 46% (compared to 44% in March) of prequalified contractors interviewed reporting difficulties obtaining the subcontractors. While this is a significant improvement since the survey commenced (65% in June 2004), and even since December 2005 (55%), there has been no further improvement. In June quarter 2006, the regions reporting difficulties obtaining subcontractors were the Far North, Mackay and the Darling Downs, whilst respondents in the Gold Coast and Brisbane regions reported the least difficulties. The subcontractors most likely to be in short supply were in the electrical (57%), plumbing (46%) and carpentry (41%) trades. Whilst the shortage of electricians has become more acute since the March survey many of the other trades including plasterers, concretors, painters and form workers, appear to be more readily available. There has been no easing of the effects of subcontractor shortages on project costs and timing with 92% of respondents reporting increased project costs and 89% reporting project delays as a result of the shortages. On average, respondents estimated that they were operating at approximately 85% of their capacity during the June quarter, up from 81% in March. Possibly due to their perceptions that they are working at or near full capacity, there has been a decline in the proportion of respondents expecting an increase in their workload with 45% (compared to 65% in March) of respondents indicating they believed their workload would increase over the next three months to October 2006. Building costs are widely forecast to increase with just over 80% of contractors expecting that costs will increase in the short term compared to 64% in the last survey.
[ View the full report ]
PQC Tender Activity

The pressure to attract tenderers was reported to have eased slightly during March quarter 2006 when the average number of tenderers was 2.9 per project compared to 2.6 in December 2005 quarter. It would appear that there was little change in this situation through the June quarter with the average number of tenderers being 3 per project.  Difficulties, however, are still being reported with regard to projects in the regional areas of Queensland, with many projects continuing to attract only a single tenderer.

[ View the table ] Building Price Movement Forecast

The Department of Public Works has forecast building cost increases of approximately 2% per quarter in the period to June 2007.
[ View the table ]

Building Materials Cost Comparison

During June quarter 2006 there were no cost increases in the building materials monitored by DPW.  According to Reed Construction Data, there has, however, been an increase during the last 12 months in the cost of all building materials monitored by DPW except for mild steel sections – beams and F14 structural timber. The most significant increases have been in aluminium windows - fixed (12.6%), 200mm standard concrete blocks (16.2%) and face bricks (settler range) (10.4%).

  [ View the full table ]Building Policy/Legislation News

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

The Building Policy Unit is developing submissions to Executive Government to report on the outcomes of its reviews of these Frameworks and to seek approval for the enhancements of the Frameworks.

2006-2007 Industry Guide: Queensland Government Building Projects

The Department of Public Works is committed to keeping the building industry up to date with the latest information about current and future capital works projects.

This is achieved through the production of the annual Industry Guide and the quarterly updating of the Internet website. An online project search facility has been incorporated in the electronic version of the Industry Guide. The online facility provides unrestricted access to updated information on the status of building projects undertaken across Queensland.

While the Industry Guide and online project search is being updated with 2006-2007 data, anticipated to be available September 2006, an Interim Industry Guide has been produced providing details of building projects, capital grants, minor works and building works programs given budget allocation in the 2006-2007 financial year.

Download the '2006-2007 Interim Industry Guide: Queensland Government Building Projects'