Australia’s construction sector is suffering under weak consumer confidence and falling house prices, with contractor margins amongst the lowest in the world, according to Turner & Townsend.
Construction costs in most regions of the world are expected to stay moderate in 2012, according to Turner & Townsend’s latest International Construction Cost Survey.
The report says there are reasons to be optimistic for the global construction market - Chinese, Indian, Vietnamese and African economies are on long-term growth paths, and demand for energy and resources is driving the growth of many new projects in natural resources.
"Worldwide, these projects add up to a substantial portfolio of long-term construction work. It is a good time to build,” the repot says.
“In most regions the markets are not overheated like they were in the last decade. That means projects are more likely to be built on time and budget."
"In other words, construction costs in most regions are expected to stay moderate during 2012.”
But the report paints a bleaker picture for Australia’s construction sector.
“The Australian construction market is lukewarm at best, with weak consumer confidence and falling house prices deterring residential construction in most states,” it says.
“Commercial construction is also weak with some oversupply from the previous boom. Tendering is competitive for the limited number of new private construction projects coming to the market.”
“However, construction of an unprecedented pipeline of resources and energy projects is ramping up.”
“Gradually, this is expected to increase construction costs as shortages of trade skills, engineering and management worsen.”
Source: Turner & Townsend