Quantity surveyor optimism improves

21th November 2006

Australia’s quantity surveyors expect workloads to continue rising over the year to September 2007, according to the latest Westpac/AIQS BRIX Building Survey.

The level of confidence peaks in the March 2007 quarter, with a net balance of 48 per cent of respondents expecting workloads to increase. However, confidence remains high throughout the next 12 months with a net balance of 30 per cent of respondents expecting workloads to increase in the fourth quarter of the survey period (September 2007).

This is a significant improvement on the final quarter of the June survey period where a net balance of 5 per cent of respondents expected workloads to fall – a 35 basis point improvement.

The survey of Australia’s major quantity surveying companies is conducted quarterly and covers in excess of $18 billion worth of projects. The survey examines each phase of the construction cycle: preconstruction, during construction and post-construction.

"This improvement in sentiment is a bit surprising given the fact we had already seen two rates rises in 2006 when this survey was conducted, with a third forecast, which we have now seen come through," says Frank Allen, Westpac’s director of property markets.

"Especially surprising is the level of optimism from New South Wales respondents for the next quarter (October to December 2006)."

Demand for quantity surveyor services ‘before construction’ in the residential sector in NSW also recovered in the September 2006 quarter. A net balance of 19 per cent of respondents indicated workloads had increased over the quarter, which is a turnaround from the June quarter where a net balance of 36 per cent of respondents indicated workloads had fallen.

"This suggests that the quantity surveyors are seeing the NSW residential market bottoming out, although we’d like to see a continuation of this trend in subsequent quarters to be confident that it is turning," Allen says.

"Also of interest is that while optimism remains high in Western Australia, those respondents were not the most positive in all quarters of the survey period which they have been for the last two surveys."

Building costs continue to rise, with quantity surveyors reporting a growth rate of 6.1 per cent for the year to September 2006, against a forecast of 5.9 per cent from the September 2005 survey. Respondents expect that building costs will rise by 5.7 per cent in the year to September 2007. Looking forward, expected building price cost growth over the 12-month forecast period is expected to be strongest in WA at 10.9 per cent and weakest in NSW at 3.6 per cent.

Some trades have experienced more stress than others. The structural steel trade had the highest cost growth in the September 2006 quarter at 4.4 per cent. Painting saw the smallest cost rise at 0.8 per cent over the quarter.

 

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