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Skip Navigation LinksDepartment of Housing and Public Works > About us > Reports and publications > Newsletters > Building Industry Bulletin > Issue 45, September quarter 2015

 Issue 45, September quarter 2015

Welcome to the Building Industry Bulletin

The quarterly Building Industry Bulletin provides updates on the latest trends within the Queensland building industry as relevant to the activities of the Department of Housing and Public Works.

In this issue

Queensland regional construction activity

The September quarter 2015 economic update from the National Institute of Economic and Industry Research (NIEIR) shows that in 2014-15 Queensland construction activity (or total work done across the dwelling, non-residential building and engineering sectors) fell by an estimated 21.7% to $50.1 billion. This was due to a $14.3 billion decrease in engineering construction, particularly in mining as the LNG project construction phase ends.

Total construction activity is forecast to fall by a further 5.0% in 2015-16, with dwelling construction expected to contribute over $2.4 billion to total construction growth. In addition, both non-residential and engineering construction are expected to have a negative contribution of $830 million and $4.1 billion respectively, resulting in a decline of $2.5 billion for the total sector. This is forecast, however, to be followed by an increase of 5.9% in 2016-17 with growth in total construction activity anticipated across all three sectors comprising total construction activity.

The outlook for Queensland's dwelling construction is positive due to continued low interest rates. After increasing by 8.5% to $15.8 billion in 2014-15, total dwelling construction is projected to increase by 15.4% to $18.3 billion in 2015-16 and 5.3% to $19.3 billion in 2016-17. Growth in new private dwelling construction of 19.1% in 2015-16 and 2.8% in 2016-17 is projected. Renovation expenditure is forecast to increase by 8.0% in 2015-16 and 10.1% in 2016-17. A fall in confidence due to external factors such as declining coal prices combined with the winding down of the construction phase of the LNG projects has had a negative impact on non-residential construction. Total non-residential building activity declined by 10.6% to $6.3 billion in 2014-15 and a further decrease of 13.1% to $5.5 billion is forecast for 2015-16. Non-residential activity, is however, expected to increase by 10.1% to $6.0 billion in 2016-17.

Finally, total Queensland engineering construction activity decreased by 33.9% to $28.0 billion in 2014-15. Although a further decline of 14.6% is forecast for 2015-16, a 5.4% increase in activity to $25.2 billion is forecast for 2016-17.

View NIEIR September report (PDF, 2.5MB)

View NIEIR June annual report (PDF, 5.6MB)

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Department of Housing and Public Works - Contractor Survey

The majority of contractors surveyed (84%) had not reported overall difficulties in employing subcontractors in the September quarter 2015 (78% in June quarter). In the same period 25% of contractors (down from 30% in June quarter) had difficulty finding suitably experienced or qualified subcontractors.

The most mentioned trades for those who experienced difficulty employing subcontractors were bricklaying, carpentry and painting. Among those respondents who experienced subcontractor shortages, ‘increased project costs due to an increase in subcontractor rates’ (71% of contractors) and ‘project delays’ (58% of contractors) were the most reported impacts mentioned by respondents.

On average, contractors estimated they were operating at 63% of total capacity in the September quarter (down from 67% in June quarter).

Two in five (40%) respondents reported their workload had increased in the past three months, 33% indicated it had stayed the same and 29% thought it had decreased. Looking ahead to the December quarter, 41% of contractors surveyed expected an increase in their workload (up from 33%). Over a third (35%) of contractors expected their workload to stay the same and 19% expected it to decrease over the next three months.

The majority of contractors surveyed (60%) expected labour costs to stay the same over the next three months. An increase in labour costs was expected by 31% of respondents and the remaining 6% expected them to decrease in the next three months.

Just over half the respondents (54% of contractors) expected building materials to increase in the December quarter, 35% expected they would stay the same and 11% of respondents expected them to decrease in the same period. On average, contractors estimated that 33% of their workload over the past three months was on behalf of government (local, state or federal).

View full report (PDF, 820KB)

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Department of Housing and Public Works - Consultant Survey

In the September quarter 2015 consultants estimated they were operating at 67% of their full capacity (down from 74% in June quarter). An increase in workload over the past three months was reported by 38% of the respondents (down from 43%). One third of respondents (33%) thought their workload had decreased (up from 14%) and the remaining 28% reported it had decreased (down from 43%).

Looking ahead to the December quarter, 38% of consultants anticipated their workload to stay the same (down from 40%) and a third (33%) expected an increase in workload (down from 42%). The remaining 20% of consultants expected their workload to decrease in the next three months (up from 17% in the June quarter).

The majority of consultants surveyed (77%), stated they would maintain their current staff numbers (up from 67% in June quarter), 22% of respondents indicated their firm was looking to increase staff numbers (down from 32%) and 1% indicated a decrease in staff numbers (remained the same).

The survey found most consultants (62%) surveyed were currently experiencing difficulties in finding work (up from 52%), with 38% reporting they were not experiencing any difficulties (down from 48%).

Of the consultants surveyed, 62% believed consultant fees would stay the same over the next three months (down from 72% in June quarter), while 22% expected them to increase (up from 17%) and 10% anticipated a decrease (up from 8%).

On average, 42% of consultants’ projects involved the use of online programs with the survey also finding 38% of consultants were satisfied with web collaboration systems.

Consultants estimated that 23% of their workload over the previous three months was for the government (52% for local government, 42% for state government and 6% for federal government).

View full report (PDF, 825KB)

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PQC tender activity

In the September quarter for 2015, Queensland Government building projects over $500,000 averaged 4.7 tenderers per project. This is up from 3.3 per project in the previous quarter—which was the first time tender activity had averaged under 4.0 since December 2006.

The chart and table below show what has been tendered for and where these projects are happening.

Tenders by project type

​​​

Open tenders by region and % of total tender value

Region
June quarter %
September quarter %
Brisbane
3
21
Central West
2
0
Darling Downs
24
7
Far North
38
12
Fitzroy
0
18
Moreton North / Sunshine Coast
1
16
Moreton South / Gold Coast
27
0
Northern
0
18
North West
0
0
South West
5
0
Wide Bay / Burnett
0
6
 
Tender activity in the September quarter 2015 was slightly higher than the average for education—schools and residential projects and within the Far North and Brisbane regions.
 

Building materials cost comparison

In the September quarter 2015, the only material monitored by the Department of Housing and Public Works that recorded a notable increase in cost was face brick – settler range (5.4%). Minor increases were recorded in 25 mpa concrete (0.9%) mild steel sections – beams (0.6%) and aluminum windows – fixed (0.5%). The only material that recorded a decrease in cost during the quarter was F8 pine 90mm x 35mm (1.4%).

According to the Cordell Building Cost Guide the most significant cost decreases between September quarter 2014 and September quarter 2015 were in face brick – settler range (6.7%), aluminum windows – fixed (6.6%) and 25 mpa concrete (4.0%).

View the table (PDF, 26KB)

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Last updated 28 July 2016    Creative Commons Attribution 4.0 International (CC BY 4.0)


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