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 September quarter update from the National Institute of Economic and Industry Research (NIEIR) shows that total Queensland construction activity is estimated to have grown by 11.6% in 2005-06. During 2005-06 this activity remained stable with around $7.0 billion work undertaken per quarter. The projected growth for Queensland construction in 2006-07 is 5.9% followed by an estimated 10.8% growth in 2007-08. The main driver of construction activity in Queensland during 2005-06 was engineering construction which represented 63% of the total growth in activity. This is compared to non-residential and residential building which represented 27% and 10% of growth in total activity respectively. This trend is expected to continue into 2006-07 with engineering expenditures expected to represent 58% of total growth, non-residential building approximately 45% and dwelling construction expected to make 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 30,000 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 around 34,000 persons 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

The extent of subcontractor shortages has remained largely unchanged over the course of 2006. Almost half of the contractors interviewed in September 2006 reported difficulties in obtaining subcontractors (44%, compared 46% in June and 44% in March). Whilst this shows significant progress since the survey started (65% in June 2004), and even since last December (55%), there has been no further improvement. For the September quarter, the regions reporting difficulties obtaining subcontractors were those of Far North (73%), Northern (67%) and Wide Bay Burnett (67%) whilst respondents in the Sunshine Coast, Fitzroy and Central West regions reported the least difficulties. The subcontractors most likely to be in short supply continued to be in the carpentry (49%), plumbing (46%) and electrical trades (40%). While the electrical shortage eased this quarter, plumbing and carpentry shortages remained elevated: plumbing at its highest level since the survey commenced in June 2004; and carpentry continuing at similar levels to those recorded over the past year. Whilst the proportion of respondents experiencing trade shortages remains similar, there is evidence that the impact of these shortages may be easing. Less now feel that shortages have led to increased project costs (71%, down from 92% in June 2006), project delays (57% down from 89%), inability to accept new projects (46% down from 73%) or the higher use of unskilled labour (29% down from 51%). Contractors in most regions continue to be operating at or near capacity, with this estimated to be, on average, 86% of their total capacity at the time of the survey. Despite this, half still anticipated that their workload would increase over the coming quarter. This outlook seemed more likely among the residential housing, single storey office and hospital sectors. As has been found consistently in previous surveys, further price rises in building costs appear likely with 71% of respondents expecting to see increases during the December quarter.

[ View the full report ]
PQC Tender Activity

The pressure to attract tenderers eased significantly in September quarter 2006, with the Department of Public Works averaging 4.2 tenderers per project compared to 2.9 per project in the June quarter.  This appears largely to be the result of the type of work available to tender for during the quarter ending September. There was strong interest from prequalified contractors, including those not regularly undertaking work for DPW, to tender for projects related to office fit out, housing and the health sectors. 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 between 1.5% and 2% per quarter in the period to June 2008.

[ View the table ]

Building Materials Cost Comparison

Unlike June quarter 2006 where no cost increases were recorded for the building materials monitored by DPW, September quarter 2006 saw cost increases in mild steel sections – beams (7.2%), 200mm standard concrete block (1.2%) and face bricks – settler range (.05%). According to Reed Construction Data, there has been an increase during the last 12 months in the cost of all DPW monitored building materials except for F14 structural timber and float glass tinted – 4mm thick. The most significant increases have been in aluminum windows - fixed (7.2%), mild steel sections – beams (7.2%) and 200mm standard concrete blocks (4.2%).

[ View the full table ]Building Policy/Legislation News

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 November 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'