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.
Queensland regional construction activity update

The March quarter update from the National Institute of Economic and Industry Research (NIEIR) shows that total Queensland construction activity grew by 12.1% to $28.6 billion in 2005-06.  The projected growth for Queensland construction in 2006-07 is 10.1% followed by an estimated 4.4% growth in 2007-08.  The main driver of construction activity in Queensland during 2006-07 has been engineering construction which is estimated to represent 55% of the total growth in construction activity, compared to non-residential and residential building representing 25% and 20% of growth respectively.  In 2007-08 engineering construction, non-residential building expenditure and dwelling construction are expected to contribute 75%, 14% and 11% respectively to total construction growth.  These percentages reflect the continuation of the resource development boom and the increase in large scale infrastructure projects to support the growth in Queensland’s population.  NIEIR estimates that the skilled labour shortage reached 34,000 persons in December 2006 and although increases in engineering and non-residential building activity are forecast through to 2009, it is anticipated that labour shortages will remain around 34,000 persons through to June 2008 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 around 2% per annum, until an expected economic decline post 2009.

[View quarterly report ] [View NIEIR Annual Report 2006]
DPW Contractor Survey

Results from the March quarter Contractor Survey indicate that after a decline in the December quarter results, 2007 may offer an improved outlook for subcontractor availability and build upon the recovery experienced in the first half of 2006.  Of the contractors interviewed during the March quarter, 40% experienced difficulties employing subcontractors, down from 55% in the December quarter 2006.  Regions reporting difficulties obtaining subcontractors were those of Darling Downs (60%), Fitzroy (50%) and Far North (46%), with the Mackay and Sunshine Coast showing lower levels of difficulty at 25% and 20% respectively.  Like the September and December quarters of 2006, subcontractors most likely to be in short supply were in the plumbing (63%), electrical (59%) and carpentry (59%) trades.  Also showing a key shortage in the March quarter were wall & floor tilers (56%).  For the 40% of contractors experiencing difficulties obtaining subcontractors, the acuteness of shortages appears to have increased across almost all trades, with many now at all time highs.  Project delays and increasing costs are very common for these contractors, noted by at least 80%.  Contractors continue to operate under strong workloads, estimated at 80% of their total capacity, matching the level of March 2006.  More, however, are anticipating workload increases in the June quarter 2007, now at 70%, higher than seen throughout 2006.  This is much higher among those working in the residential multi-unit sector.  The majority of contractors expect increasing costs in the short term, 59% feel labour costs will increase, while 65% believe building material costs will increase, similar to the levels reported in recent quarters.     

[ View the full report ]
PQC Tender Activity

There was an improvement in tender activity during March quarter 2007, with the average number of tenderers per project increasing to 4.6, up from 3.8 in December quarter 2006.  As with the previous quarter, this largely appears to be the result of the type of work available to tender for during March quarter 2007. Once again there was strong interest from prequalified contractors to tender for housing projects, particularly within the Brisbane region. Difficulties are however, still being reported with regard to projects in the regional areas of Queensland, with many projects continuing to attract only a small number of tenderers.

[ View the table ] Building Price Movement Forecast

The Department of Public Works has forecast a building cost increase of 1% for the quarter ending June 2007, with a further increase of 2.5% per quarter in the period to June 2008.

[ View the table ]

Building Materials Cost Comparison

During March quarter 2007 there were cost increases in 25mpa concrete (5.3%) and mild steel sections – beams (0.1%). According to Reed Construction Data, there has been an increase during the last 12 months in the cost of all building materials monitored by DPW except for F14 structural timber, aluminium windows – fixed and float glass tinted – 4mm thick. The most significant increases during this 12 month period have been 25mpa concrete (8.4%), mild steel sections - beams (7.6%) and 200mm standard concrete block (1.2%).   

[ View the full table ]Building Policy/Legislation News

2007-2008 Industry Guide: Queensland Government Building Projects

The Department of Public Works informs the building industry on the latest information about current and future capital works projects.

This is achieved, in part, through the production of the annual Industry Guide and the regular updating of the Online Project Search facility. The Online Project Search provides unrestricted access to updated information on the status of building projects undertaken across Queensland. This information is drawn from the PQC System.

While the 2007-2008 State Budget (Budget Paper 3) is being prepared and anticipated to be released in early June, it is timely that departments are reminded of policy requirement 1 within the Capital Works Management Framework, which relates to creating and maintaining accurate and current project records in the PQC System. All departments need to ensure that records of their building projects (where these are estimated to exceed $250,000) are created and maintained in the PQC System as soon as an allocation has been made in the budget. This will enable a seamless update of the Online Project Search with the 2007-2008 financial year data.

The Online Project Search facility can be accessed by anyone and provides:

• updated information on the status of current and future Queensland Government capital works building projects undertaken across Queensland;
• full searchability of all building opportunities utilising a wide range of criteria;
• the ability to search for individual projects by name;
• customised lists of projects created by the user; and
• project commentary.