Welcome to the Building Industry Bulletin

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 grew by 13.9% to $32.5 billion in 2006-07. The projected growth for Queensland construction in 2007-08 is 9.8% to $35.7 billion followed by an estimated 3.5% growth to $36.9 billion in 2008-09. There has been an upward revision in the estimate for 2007-2008 from the June quarter report due to the commencement of major water projects. 

In 2007-2008 the contribution of private and public engineering expenditures is expected to represent 80% of the total growth in Queensland construction activity, with non-residential building and residential construction contributing 19% and 1% respectively. In 2008-2009, engineering expenditures are once again expected to dominate with a contribution of 69% to the overall growth in Queensland construction expenditures, whilst non-residential building and residential construction are projected to contribute 41% and -9.0% respectively. 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 and industrial growth. 

NIEIR estimates that by December 2007 the skilled labour shortage will reach 34,000 persons and remain at this level until 2008-2009. According to NIEIR the high employment growth rates of the recent past have exhausted the supply of available and experienced labour. This is placing an upward pressure on wage rates and as a result, the projection for 2008 is for the quarterly inflation rate to reach up to 3.6% at annual rates.

[View quarterly report] [VIew NIEIR Annual report 2007]

DPW Contractor Survey

According to results from the most recent Contractors Survey, the general trend of an improved long-term outlook for subcontractor shortages continued in the September quarter. It is interesting to note that figures suggest a seasonal pattern may be emerging now that the highs of 2004 and 2005 appear to have abated: with quarterly levels from December 2006 to September 2007 tracking at similar levels to December 2005 to September 2006.

Just over four in ten (43%) contractors experienced difficulties employing subcontractors in the September quarter, up seven percentage points since June 2007. If the end of year pattern from 2006 translates to 2007, a further rise in shortage levels could be expected in December.

For those experiencing shortages, it was more than twice as likely to be an overall shortage (68%) than one concentrated in a small number of specific trades (32%). Across all sectors carpentry was the primary trade shortage mentioned by 74% of contractors, up from 44% in June 2007. Other trades with higher levels of difficulty in September 2007 were electrical (56% up from 45%), plumbing (53%, up from 41%), concreting (50%, up from 41%) and tiling (50%, up from 38%).

Contractors continue to operate with strong workloads, estimated at 85% of total capacity, a return to September 2006 levels and up from 79% in June 2007. Well over half (65%) of contractors anticipated workloads would increase in the December quarter – this is higher than seen for much of the survey’s history, with the exception of March 2007 (70%) and March 2006 (66%).

As in the June quarter, the majority of contractors agreed that building material costs would increase in the December quarter, however opinions on the future of labour costs were mixed. Although most (73%) expected building material costs to increase in the short term the outlook for labour costs was less certain with 58% of contractors predicting they would increase and 40% indicating they would stay the same.

[ View the full report ]

PQC Tender Activity

Tender activity improved during September quarter 2007, with the average number of tenderers per project increasing to 5.3, up from 4.6 in both the March and June quarters of 2007. As with the previous two quarters, this largely appears to be the result of the type of work available to tender for during the quarter.

Once again, there was strong interest from prequalified contractors to tender for housing projects, particularly within the Brisbane and Moreton regions. 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

Although the Department of Public Works forecasts for building cost movements have been marginally revised downwards for September quarter 2007 through to June quarter 2008, it is anticipated that cost increases of between 1% and 1.5% will result during this period. Building costs are expected to rise further during 2008-2009 with the Department forecasting quarterly increases of between 2.5% and 3%.

[ View the table ]

Building Materials Cost Comparison

The most notable increase in Queensland building materials for the September quarter 2007 was Face Brick - Settler Range rising by 2.01% and mild steel sections - beams rising by 0.37%.

Over the last 12 months, there has been no increase in the cost of aluminium windows - fixed and float glass tinted - 4mm thick.

According to Reed Construction Data, the most prominent increases during the last 12 months have been in F14 structural timber and 25mpa concrete.

[ View the full table ]

Building Policy/Legislation News

Capital Works Management Framework

Revisions to the Capital Works Management Framework (CWMF), the Queensland Government's policy for managing risks in the planning and delivery of government building projects, have been approved and the revised version is now available by clicking here.

The revised framework is timely in view of the Premier's recent letter to Ministers requesting that public sector entities within their portfolio take appropriate action to ensure compliance with the CWMF. The Premier's letter was in response to the recommendations of the Queensland Audit Office's Report No. 5 entitled Results of Performance Management Systems Audits of Capital Works at Departments of Corrective Services, Education, Health and Housing, which was tabled in the Legislative Assembly on 1 November 2006.

Building Accessibility - Responsibilities of Departments

Current Australian and Queensland legislation, in particular the Disability Discrimination Act 1992 (Cwlth), the Anti-Discrimination Act 1991 (Qld), and the Disability Services Act 2006 (Qld) places an onus on building owners, managers and occupiers to ensure that they treat people with a disability no less fairly than they treat others. With few exceptions, this legislation obliges the State to ensure that:

• new buildings are designed to be accessible for people with a disability; and
• where necessary, existing buildings in which building work is proposed as part of capital works improvements, are upgraded to ensure compliance with disability access and facility provisions.

A Practice Note addressing building accessibility was released under the Capital Works Management Framework in December 2003. At the time, it was expected that the Australian Building Codes Board (ABCB) would be releasing its publication Disability Standards for Access to Premises (Premises Standard)   around mid-2004. 

• A draft Premises Standard and various other proposed changes to the Building Code of Australia and Australian Standards were released for public comment in February 2004. It is understood that while most of the submissions received were supportive, there were also opposing views on the stringency and general direction of the proposals. After the public consultation period closed on 30 April 2004, the ABCB provided advice to the relevant Australian Government ministers on the proposals, however the Premises Standard has not been published to date.

In the absence of resolution of the intended technical and procedural proposals contained in the Premises Standard, the current requirements prescribed in the Building Code of Australia with respect to providing access for people with a disability continue to apply. Accordingly, new building work is to be designed to the Australian Standard AS1428 Design for Access and Mobility - Part 1 (2001) and Part 4 (1992) and any associated carparking for people with disabilities is to be designed to the Australian Standard AS2890 Parking Facilities - Part 1 (1993).  These previously referenced Standards are not limited in their coverage to people with mobility impairment, but cover a wide range of disabilities including sight and hearing impairment.

• Given that further changes to the standards are likely to occur in future, departments are additionally encouraged to consider briefing their service providers to use the enhanced provisions of AS1428 Design for Access and Mobility - Part 2 (1992) for new building work on the basis that any revision will contain provisions at least the equivalent of those in Part 2.

Concurrently, departments should be developing and implementing action plans to address accessibility issues in their building portfolios. A broad perspective should be used when preparing project briefs on building access and workplace/customer facilities (eg. toilet amenities, workstations, counters and signage should be considered in addressing non-discriminatory delivery of business services and provisions for staff). Further information is available in the previously mentioned Practice Note, which can be found by clicking here.  

Building Policy Unit Website Changes

The information available through the build website is being progressively updated to align with the recent revision of the Capital Works Management Framework (CWMF). In particular, the amendments will affect the sections; Building Policy and Building Industry and Prequalification (PQC). For further information or assistance, contact the Coordinator Officer, Building Policy Unit in the first instance on telephone: 3224 5482.