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Skip Navigation LinksDepartment of Housing and Public Works > About us > Reports and publications > Newsletters > Building Industry Bulletin > Issue 28, June 2011

Issue 28, June 2011

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.

In this issue

Queensland Regional Construction Activity Update

The June quarter 2011 economic update from the National Institute of Economic and Industry Research (NIEIR) shows that in 2010-11, Queensland’s construction activity is estimated to have declined by 1.5% to $43.9 billion.

According to NIEIR, the short-term outlook is for strong growth in private engineering investment, the outlook for housing investment remains subdued and for non-residential building investment the outlook is pessimistic.

In 2011-12, NIEIR’s forecasts indicate the Queensland construction industry will increase by 12.5%, with the majority of the increase due to the expansion in mining investment, more specifically LNG investment. Flood damage repairs are expected to lead to strong growth in housing expenditures, however, this increase will be offset by the decline in public non-residential building expenditures as the stimulus programs conclude.

In 2010-11, it is estimated that total Queensland private dwelling construction expenditures will fall by 9%. According to NIEIR, the impact of the Queensland Government's housing assistance measures and an improving economic outlook for Queensland over the 2011-12 fiscal year is likely to see housing approvals recover in the December quarter of 2011. In 2011-12, the growth in private dwelling construction is projected at 7%, followed by a 1% increase in 2012-13.

In 2010-11, total non-residential building expenditure is expected to decline by 1.5%. In 2011-12, total non-residential building activity is projected to decline by 20%, followed by a further 27% decline in 2012-13.

NIEIR projects an increase of 3.2% in total Queensland construction in 2012-13 with private engineering expenditures continuing to contribute strongly to growth.

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DPW Contractor Survey

The proportion of contractors reporting difficulties employing subcontractors overall during the last 2 years has remained fairly consistent at around 10%. However in the June quarter 2011 the overall level of difficulty reported increased to15% from 10% in the December quarter 2010. In contrast, the proportion of contractors having difficulty finding suitably experienced or qualified subcontractors decreased to 24% from 30% in the March quarter (the highest level reported since the question was first asked in late 2008).

The split of views among those experiencing shortages during the June quarter changed considerably from the previous quarter. A significantly lower 45.5% (compared to 63% in March) believed it was an issue in a small number of specific trades while the remaining 54.5% (compared to 37% last quarter) perceived this was the case across all trades. The most mentioned trades among those experiencing difficulty employing subcontractors were carpentry and electrical.

Among those who are experiencing subcontractor shortages, increased sub-contract rates resulting in higher project costs (68%) and project delays (59%) were reported as the major impacts.

On average, contractors estimated they were operating at 61% of total capacity, which represents a slight decrease from the previous quarter (65%) and a more significant decrease from June quarter 2011 (68%). Looking ahead to the coming quarter, contractors remained reasonably optimistic, with the majority (79%) expecting their workload to either increase (38%) or stay the same (41%).

The large increase seen in the March quarter survey in the number of respondents who believed that building material costs would increase over the next 3 months (79% up from 68% in the December quarter) was more of less sustained in the June quarter with 73%. Also staying at a similar level was the expectation of contractors that labour costs will increase in the next 3 months (39% compared to 40% in March).

On average, contractors estimate that 41% of their workload over the past 3 months has been on behalf of government.

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DPW Consultant Survey * * * N E W * * *

Overall, the results of the second DPW Consultant Survey remained similar to those of the previous survey conducted in March. One in 4 consultants (25%) surveyed think their workload increased in the past 3 months, 33% thought it had stayed the same and 40% indicated that it had decreased.

Looking ahead to the coming quarter, consultants remain reasonably optimistic with 38% expecting their workload to increase. Only 16% thought their workload would decrease while a larger 40% expect it to remain the same. The optimistic outlook was mostly apparent among those whose major projects were in the Educational construction sector (40% vs 38% all).

Despite consultants remaining reasonably optimistic about their workloads increasing in the coming quarter, only 25% stated their firm was looking to increase staff numbers. The majority (72%) said their company would maintain their current staffing.

The survey found 52% (35% “yes” and 17% “somewhat”) of all consultants are currently experiencing difficulties in finding work. Of these respondents, the main type of consultant work undertaken, Building Designer/Architecture firms appeared to be experiencing greater work shortages (72% vs 52%all).

Of the consultants surveyed, 65% believed consultant fees would stay the same over the next three months, while 20% indicated they would decrease. Only 15% believed the fees would increase.

On average, 26% of consultants’ projects involved the use of online programs. More private sector works were submitted online by consultants over the last three months than public sector works (51% vs 46%). The survey also found 42% of consultants surveyed were satisfied with web collaboration systems.

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PQC Tender Activity

Tender activity for Queensland Government building projects over $250,000 increased significantly in the June quarter 2011, with an average of 8.9 tenderers per project, compared to 5.8 in the March quarter and 6.8 in the December quarter 2010.

Looking at the value of open tenders accepted in the June quarter compared to March quarter 2011, the breakdown by project type was, 41% for residential projects (down from 57%), 33% for education-schools (up from 12%), 14% for authorities (up from 8%), 8% for administrative/offices (up from 4%) and 3% for Hospitals/Health/Welfare (down from 17%).

There was a wider distribution of tender activity across the regions in June quarter compared to the March quarter with only 27% of tenders located in Brisbane (down from 36%). A further 14% were in Northern (no change), 14% in Fitzroy (up from 9%), 13% in Fitzroy (up from 9%), 11% in Moreton South/Gold Coast (up from 1%), 8% in Mackay (up from 4%) and 14% in other regions.

As with the March quarter tender activity for residential projects during the June quarter was notably higher than the average for all projects.

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DPW Building Price Index

The Department of Public Works' Building Price Index (BPI) tracks price movement for typical Queensland Government buildings to a maximum of $50M.

The current index indicates there was a decrease of 1.5% in building cost movement in the June quarter 2011. Although there is not expected to be any price movement for the remainder of 2011, price rises are anticipated from March quarter 2012, with the Department forecasting quarterly increases of between 1.0% and 1.25% through to June quarter 2014.

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Building Materials Cost Comparison

During the June quarter 2011, the only material monitored by the Department of Public Works that increased in cost was, mild steel sections – beams (0.27%).

According to Reed Construction Data, the most significant cost increases between the June quarter 2010 and the June quarter 2011 were in mild steel sections - beams (25%), reinforcing steel meshes (10%), 200mm standard concrete block (6.3%) and F8 pine 90x35 (4.7%). During this same period the there was no change in the cost of aluminium window – fixed, float glass tinted - 4mm thick an6d face brick - settler range.

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Building Policy News

For further information or contacts on any topics listed below, please contact us at All documents are available on this website.

State Procurement Policy Requirements

From 1 July 2011, under the State Procurement Policy, basic contract information for all awarded contracts and standing offer arrangements over $10,000 in value must be published on the Queensland Government Chief Procurement Office’s (QGCPO) website ( The basic contract information is required to be published for these commissions and contracts within 60 days of the contract date. Additional contract details for contracts over $10 million are also required to be published on the QGCPO website. The additional details are outlined in QGCPO’s Contract disclosure guidelines.

The following documents have been updated to reflect these changes:

Capital Works Management Framework policy document (revised version July 2011)
Prequalified – Now What? Fact sheet (PDF, 114KB).

Capital Works Management Frame Work – Policy Advice Notes: Advancing government priorities through the use of non-price criteria on government building projects

The policy advice note Advancing government priorities has been updated to improve clarity and readability, to add the example of the Recycling Policy for Buildings and Civil Infrastructure as an opportunity to use non-price criteria and to reflect recent changes to the Indigenous Employment Policy for Queensland Government Building and Civil Construction Projects (IEP 20% Policy) and its application to meet government priorities by using non-price criteria in tender evaluations.

Eligible tenderer lists for government building projects

Under the Capital Works Management Framework, departments must engage prequalified consultants where the commission fee is expected to exceed $30,000 in value and/or the service risk rating is 3 or 4, and engage prequalified contractors for contracts expected to exceed $250,000 in value.

The policy advice note provides guidance to departments on the use of eligible tenderer lists for such commissions/contracts, in particular, the appropriate timing for generating eligible tenderer lists.

Local Content in Queensland Government building projects

A revised version of the policy advice note: Local Content in Queensland Government building projects also reflects changes to the Local Industry Policy, Local Industry Policy Guidelines (May 2011) and the new legislation Queensland Industry Participation Act 2011. The purpose of this policy advice note is to outline the approach to be used for the incorporation of local content (wherever possible) in government building projects.

Local Industry Policy: Implementation for government building projects

The policy advice note: Local Industry Policy: Implementation for government building projects has been revised to include updated information relating to the Local Industry Policy administered by DEEDI and the recently released Local Industry Policy Guidelines (May 2011). New legislation, the Queensland Industry Participation Policy Act 2011, facilitates implementation of the Local Industry Policy. The aim of this policy advice note is to provide guidance to departments on implementation of the Local Industry Policy for government building projects.

Rectification of building defects or omissions after final completion

The policy advice note: Rectification of building defects or omissions after final completion has been updated to reflect organisational changes within the Department of Public Works and to emphasise that timeframes exist at law to instigate proceedings for work performed under a contract or under seal.

Related Bodies Corporate: Policy applying to the preparation of contractor select tender lists

The policy advice note Related Bodies Corporate: Policy applying to the preparation of contractor select tender lists has been updated to reflect the Government’s policy regarding the inclusion of two or more related companies on the same contractor select tender list. The policy advice note covers the definition of related bodies corporate, why the policy should be applied to select tendering, when exemptions may be provided and the process to apply for an exemption on a government building project.

This policy advice note replaces the policy advice note Related Entities: Policy applying to the preparation of select tender lists.

Capital Works Management Frame Work Guideline – Contractor PQC Performance Reporting

The Contractor PQC Performance Reporting guideline was released in May 2011.

The guideline (which was formerly a policy advice note) has been revised to provide improved guidance and clarity and incorporates a new and more efficient procedure for completing a contractor PQC performance report.

Update to building consultancy contracts

The long and short forms of the General Conditions of Contract for Consultancy Services administered by Contract Services, Department of Public Works, were recently amended to incorporate a clause regarding collusive arrangements, similar to that already included in the Department’s suite of construction contracts.

Additionally, the long form of contract was amended to provide for the publication of contract information; the default clause was amended so that show cause notices are to specify the address at which cause is to be shown and the date by which the consultant is to show cause is no longer restricted to a minimum of 7 days; and notice by email, excluding notices in respect of disputes and claims, is now provided for.

There were also some minor amendments to referencing, and the drafting note to project officers in schedule 1 of the long form contract was updated.

The clauses affected by these amendments include:

  • General Conditions of Contract for Consultancy Services (Long Form) (Cl 2.10, 9.4, 11.3, 12A.1, 20.2, Schedule 1: Item 6 and drafting note to project officers); and
  • General Conditions of Contract for Consultancy Services (Short Form) (cl 2.5)

More information on building consultancy contracts.

Waste Levy - Amendment to commencement date

The Queensland Government has postponed the intended date for commencement of its proposed new waste levy (referred to in the March quarter bulletin as a Recycling Levy) from 1 July 2011 to 1 December 2011 due to the impacts earlier in the year of widespread flooding and Cyclone Yasi. The levy is proposed to apply to waste sent to landfill sites by the commercial, industrial, construction and demolition industries. The Queensland Government has introduced the Waste Reduction and Recycling Bill 2011. Industry information sessions across the state are planned for October and November in the lead up to commencement of all provisions of the legislation. Further information on this initiative is available on the Department of Environment and Resource Management website.

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Last updated 23 January 2013    Creative Commons Attribution 4.0 International (CC BY 4.0)

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