August 2010 - Building & Construction Update

One of the key findings from The Reality Channel, published in May 2010 was that despite a high level of tendering/costing/feasibility work across the market, visibility around the timing of actual construction work remained quite low. We have, therefore, asked our industry contacts for some feedback as to whether that activity has translated into the commencement of construction. We have also asked for an update on any changes in conditions since we spoke to them in May.

Activity has slowed since May, particularly in private sector non-residential development. Lack of available finance has led to project delays. The major implications are that (1) FY11 activity is likely to be lower than had previously been anticipated and (2) Once finance does become available, there will be a significant backlog of projects with development approval, leading to labour supply shortages and cost pressures across the industry (particularly if this coincides with the commencement of many of the infrastructure projects that are still in the pipeline).

For further information please contact Jodie Baker & Lorraine Robinson