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Confidence returning to multi-unit market
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A national survey of the construction and development industry shows that there has been a significant increase in respondents predicting renewed activity in the multi-unit residential sector for 2010.
The 10th Construction Sentiment Index produced by international property and construction consultants Davis Langdon has shown some 56 percent of respondents expect the multi-unit residential sector to make a major contribution to overall construction activity nationally in the next 12 months.
This is up from only 39 percent expecting this sector to contribute to growth 12 months ago.· Davis Langdon’s Construction Sentiment Index inched up two points in the past three months reaching 66. National research manager Rachel Kelloway said the Sentiment survey showed that overall respondents were cautiously optimistic about 2010, but there were some real areas of concern that still existed.·The Sentiment Monitor has tracked improving industry sentiment since it reached its lowest point of 51 in February this year, but at the current level of 66 it is still well off its peak of 142 recorded in late 2007.· "The key findings of the 10th survey show that costs have emerged as one of the top three problems cited, planning pressures seem to be easing, finance is still hard to secure and overall sentiment continues to improve," said Ms Kelloway.· Looking at the year ahead respondents named the civil and resource sector as the one most likely to contribute to growth with a total of 86 percent highlighting this area.
This was an increase of 11 percent on the last survey.·The health sector has slipped into second place with 79 percent of participants naming it most likely to contribute , while tourism, manufacturing and office remain the sectors least likely to contribute to growth, with 77 percent, 76 percent and 74 percent respectively agreeing that they will contribute the least.· Ms Kelloway said an increasing number of participants reported experiencing changes in their business since the Federal Government’s economic stimulus packages were released with 57 percent saying they had experienced change, an increase of five percent on three months ago.·“Most reported an increased workload while also claiming that longer hours were the norm as a result of the stimulus package work,” she said.· “However, while the majority reported increasing staff levels and higher workloads, there was an overtone that profitability had not increased in line with the volume of work.”·Other key findings of the Sentiment survey were:-·
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54 percent of respondents now feel that industry is experiencing a skills shortage, a 10 percent increase on the last survey.
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Shortages worsened or remained steady across most trades with the three worst affected areas being plumbers (up 6 percent to reach 11 percent); tilers and carpenters (both up five percent to reach 10 percent and 13 percent respectively)
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Poor succession planning and an insufficient number of apprenticeships were named as long term key explanations for industry shortages.
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The length of time it takes to obtain planning approvals remains an issue with 64 percent of respondents citing excessive or protracted timeframes.
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However, there has been an improvement in this area with 71 percent expressive concerns in the last survey three months ago.
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For those impacted by planning problems the delays appear to be increasing. In September 88 percent said timeframes were protracted by 30 percent or more, whereas in this survey that figure has jumped to 91 percent.
Ms Kelloway said in the last survey there was an ‘about turn’ in the level of new business which respondents were reporting.·“Little has changed this time around,” she said.· “Those reporting an increase in the level of new business inched up by two percent to 31 percent, while those reporting that it had decreased dropped fractionally to account for 35 percent, down two percent on last survey.· The Sentiment survey showed sentiment toward Industrial relations improved further in the past six months, now with a very positive 90 percent of respondents agreeing that Industrial Relations are Good to Very Good at the moment and a further 16 percent believe they are Very Good.· Access to finance remains the number one obstacle in the development process, but respondents expect this situation will begin to ease in the year ahead. Twenty percent of respondents said they were attempting to secure finance currently and of those 59 percent were seeking $100million or more.·
* For further information, contact Paul Wilson at Promedia Public Relations on 07 5593 2011 or
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