The recent International Construction Market Survey details what changes we should expect:
Economic growth is slowing in Australia and interest rates are at a record low. As the natural resources boom comes to an end, projects in that sector are complete or completing with few new projects in the pipeline. A falling exchange rate will help balance the economy, benefitting industries such as tourism, education and agriculture.
Construction markets and trends
The residential property sector is making a comeback with Sydney leading the way due to cuts in interest rates in early 2014 and other states are set to follow. There are major infrastructure projects underway and planned such as the Sydney Metro Northwest, Sydney Metro City & Southwest and the Melbourne Rail Link.
However, tight government budgets are a constraint for this sector.
Tender Price Outlook
Strong competition is keeping tenders competitive in the majority of markets. Australian cities are expecting only moderate tender price increases of around three percent in the next 12 months.
With the exception of Sydney's apartment market, the cost of construction is flat and the outlook moderate over the medium term. Labour availability has improved significantly. Wages are forecast to be flat in real terms or even falling in locations such as WA. Materials prices are also forecast to be flat or falling.
Overall, this is a good time to build.
Construction costs should remain fairly stable although some residential construction trades may become increasingly difficult to source, adding pressure to costs.
How the construction industry can save time and money
PlantMiner can help the sector in the development and delivery of new infrastructure and services.
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