Australian Property News

Sentiment improves in construction sector

Posted on Tuesday, October 12 2010 at 1:26 PM

Positive sentiment has slightly improved across Australia’s construction sector, according to research by international property and construction consultants Davis Langdon.

The Davis Langdon Construction Sentiment Index has risen by two points in the past six months to reach 63.

Davis Langdon’s managing director Mark Beattie says there are glimmers of light showing up throughout the construction sector.

“The industry continues to face a reoccurring set of obstacles and a mixed outlook in terms of workload,” he says.

“However, labour force capacity constraints are not as prevalent and an encouraging proportion of industry participants reported increased levels of new business from the private sector.”

The Davis Langdon research canvassed the views and sentiment of around 1800 construction related businesses around Australia.

It found that the number of people who believed there were problems within the construction industry fell to 77 per cent, down from 85 per cent in March.

“In an encouraging sign for the industry, more respondents are experiencing a rise in new business activity with participants reporting that their level of new business – driven by public and private sector investment – had increased in some way, rising from 43 per cent in March to 49 per cent now,” says Davis Langdon research manager Michael Skelton.

He says the general outlook for workload levels in the next 12 months had lost some of its shine in the current survey with a considerable number expecting workloads to remain steady – 47 per cent, up from 40 per cent in March – but it varied significantly across the states.

Just over 70 per cent of West Australian respondents anticipated an increase in workload while in Queensland only 10 per cent were this positive about the coming 12 months.

According to the Davis Langdon research, respondents listed access to suitable finance as the number one obstacle in the building and construction process.

“Compared to our last survey in March, industry participants were less optimistic about the situation improving and expect access to finance to remain their biggest hurdle over the next year,” says Skelton.