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Skip Navigation LinksDepartment of Housing and Public Works > About us > Reports and publications > Newsletters > Building Industry Bulletin > Issue 25, September 2010

Issue 25, September 2010

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 September 2010 economic update from the National Institute of Economic and Industry Research (NIEIR) shows that in 2009-10, Queensland’s construction activity is estimated to have declined by 1.9% to $44.8 billion.

The short term outlook to mid 2011 is expected to be one of stability with slightly lower levels of activity compared to the June quarter 2010. Total construction activity in Queensland is projected to decline by 2.1% to $43.9 billion in 2010-11 with any growth in residential and non-residential building expenditures likely to be offset by falls in engineering construction expenditure as major projects are completed. By mid 2011 the fall in Queensland construction from the Global Financial Crisis peak in the September quarter 2008 is estimated to be 8.2%.

Over 2011-12 Queensland construction is projected to grow strongly by 6.1% to $46.5 billion. This will be driven by strong growth in housing and engineering construction that will more than offset the fall in non-residential construction as the fiscal stimulus projects are completed.

Regionally, total construction activity in Brisbane is projected to fall by between 1% and 2.5% for each of the next two financial years, while Moreton’s construction activity is expected to fall by 7% in 2010-11, followed by stability in 2011-12. For Wide Bay Burnett, construction activity is projected to decline by 18% for 2010-11 followed by stability in 2011-12. Darling Downs is projected to have strong positive growth for 2010-11 with 8% growth projected, followed by a small decline in the following year, while Fitzroy is projected to grow by a cumulative 70% over the next two years provided at least one LNG project commences. Construction activity in Mackay is projected to grow by 16% in 2010-11 and 9% the following year, while Northern is projected to fall by 11% in 2010-11 offset by similar growth in 2011-12.

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DPW Contractor Survey

The number of contractors reporting difficulties employing subcontractors overall showed some improvement in the September quarter decreasing to 9% from 13% in the June quarter. However, the proportion of contractors having difficulties finding suitably experienced or qualified subcontractors increased significantly in the September quarter to 24%, (compared with 16% in the June quarter) approaching the high of 28% in the March quarter 2010. Respondents with electrical and cabling licenses were most likely to experience difficulties than those with other license types (53.8% vs 23.8% all).

The split of views among those experiencing shortages was approximately 30/70, with 70% believing that it is an issue in a small number of specific trades (compared to 49% last quarter) and the remaining 30% (compared to 51% last quarter) perceiving this was the case across all trades. The most mentioned trades among those experiencing difficulty employing subcontractors were electrical, carpentry and painting.

The main consequence reported resulting from subcontractor shortages was increased project costs, noted by 45% of respondents compared to 47% in the June quarter. There was a significant decrease in the proportion of respondents indicating project delays were the main consequence of subcontractor shortages at 35% compared to 73% in the June quarter.

On average, contractors estimated they were operating at 67% of total capacity, at a similar level with the June quarter. Looking ahead to the coming quarter, contractors remained reasonably optimistic with 38% reporting that they expected workloads to increase, although this was a 12% decrease from the 50% in the June quarter. The optimistic outlook was especially apparent amongst respondents in the residential high density multi unit sector (75% vs 38% all).

On average, contractors estimate that 41% of their workload over the past three months has been on behalf of government, up from 35% in the June quarter and representing a return to previous consistent scores seen over the last few quarters of 40% - March, 36% - December, 35% - September and 36% - June 2009.

PQC Tender Activity

Tender activity for Queensland Government building projects over $250,000 continued to decline in the September quarter with an average of 4.3 tenderers per project compared to 4.9 in the June quarter and 5.7 in the March quarter. This represents a return to average tender activity reported prior to the Global Financial Crisis. There was also a lower proportion of residential projects (that often attract a higher number of tenderers) tendered during the quarter.

Looking at the value of open tenders accepted in the September quarter, the breakdown by project type was, 45% for hospitals/health/welfare projects (up from 5% in the previous quarter), 19% for residential projects (down from 55% in the previous quarter), 15% for education - schools (down from 30%), 10% for authorities (up from 5%) and 8% for education – colleges (up from 2% in the previous quarter).

Unlike the June quarter where there was a wide distribution of projects across all regions in the state, 54% of all open tenders awarded by value in the September quarter were located in Brisbane (compared to 28% in the June quarter). A further 15% were located in Fitzroy (up from 3%), 11% in North West (down from 13%) and 6% in the Far North (down from 13%).

The average number of tenderers during the September quarter was notably lower in some regions of Queensland including: Darling Downs; Fitzroy; Northern; and Moreton North/Sunshine Coast.

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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.

It indicates there was no building cost movement in the September quarter 2010, and this is expected to continue through to the December quarter 2010. Price rises are anticipated from March 2011, with the Department forecasting quarterly increases of between 0.5% and 1.5% through to June 2013.

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Building Materials Cost Comparison

During the September quarter 2010, the materials monitored by the Department of Public Works that increased in cost were, mild steel sections – beams (12.7%), 200mm std concrete block (2.9%) and 25mpa concrete (2.0%). There were no materials that decreased in cost during the quarter.

According to Reed Construction Data, the most significant cost increases between the September quarter 2009 and the September quarter 2010 were in mild steel sections – beams (3.3%), 200mm std concrete block (2.9%) and face brick – settler range (1.6%). During this same period the largest cost decrease was in 25mpa concrete (-6.0%). There was no change in the cost of F8 pine 90x35, float glass tinted - 4mm thick and alum. window - fixed.

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Building Policy News

For further information or contacts on any topics listed below, please contact us at

Capital Works Management Framework – Contractor PQC Financial Requirements Guideline

A revised version of the Capital Works Management Framework guideline: Contractor PQC Financial Requirements will be released shortly.

The guideline provides detailed information about financial criteria considered in determining the prequalification status of a contractor, the financial capacity of a preferred tenderer, and the financial capacity assessment process for government building projects.

First published in January 2001, the guideline has been revised to improve clarity on existing financial criteria, incorporate new financial criteria and requirements, and to specify additional information a contractor must provide for a financial capacity assessment.

New Policy Advice Note under the Government Employee Housing Management Framework, Agency Obligations for Managing Lead Related Risks in Mount Isa

This policy advice note addresses responsibilities of departments which own or manage government employee housing in Mount Isa in relation to managing lead related risks. Departments must include specific material in their tenancy management processes and ensure their premises are appropriately cleaned and maintained to minimise lead exposure.

Revisions to the Queensland building codes

In consultation with key stakeholders, Building Codes Queensland has developed:

  • draft revisions to the Queensland Development Code (QDC) Mandatory Part MP 4.1 – Sustainable buildings. The revised draft further consolidates Queensland-specific building standards to achieve the required energy efficiency and introduces specific provisions for end-of-trip facilities for cyclists in major developments. Building types affected by these revisions include office (class 5) buildings, shopping centres, tertiary educational facilities and hospitals greater than 2000 square metres in specific locations.
  • a draft code for improving fire safety in residential care buildings built prior to 1 June 2007, Mandatory Part MP 2.3 – Fire Safety in Existing Residential Care Buildings (pre 1 June 2007), proposed to commence on 1 January 2011. The introduction of this draft code is part of the next stage in the Queensland Government’s fire safety improvement program for residential care buildings, following the Childers Palace Backpackers fire in June 2000.

Further information and the revised QDC drafts can be obtained from the Department of Infrastructure and Planning website.

Updates to MMF guidelines Building Maintenance Budget and Building Maintenance Policy, Standards and Strategy Development

Minor updates were completed to 2 MMF guidelines to ensure the guidelines continue to provide relevant advice to government departments. The updated guidelines are available on the Maintenance Management Framework website.

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Last updated 05 July 2012    Creative Commons Attribution 4.0 International (CC BY 4.0)

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