Chamber of Commerce and Industry Queensland (CCIQ) spokesman Dan Petrie said the value of engineering construction work in the state was half of what it was a decade ago with delays in approving new projects partly to blame.
Chamber of Commerce and Industry Queensland (CCIQ) spokesman Dan Petrie said the value of engineering construction work in the state was half of what it was a decade ago with delays in approving new projects partly to blame.

Tough times for Queensland building sector

QUEENSLAND'S $50 billion construction sector continues to face "very tough" times sparking calls for more investment by governments in public works.

There was more bad news for the sector yesterday with the much-watched national construction index, compiled by Ai Group and the Housing Industry Association, showing declines in residential, commercial and engineering projects.

Apartment building activity across Australia contracted last month for the 18th month in a row falling more steeply than in the previous month.

The performance of the construction index fell 2 points in September to 42.6. That leaves the index well below the 50-point mark that separates expansion and contraction.

Ai Group said a dip in engineering activity has added weight to the argument governments should boost infrastructure spending.

That was backed by Master Builders Queensland deputy chief executive Paul Bidwell who said conditions across the building industry remained "very tough."

"There is very little private sector investment," said Mr Bidwell. "Governments at all levels are under pressure to deliver surpluses but given the strength of their balance sheets they could afford to borrow more. That could be funnelled directly into public works such as school and hospitals."

 

Master Builders Queensland deputy CEO Paul Bidwell.
Master Builders Queensland deputy CEO Paul Bidwell.

 

Chamber of Commerce and Industry Queensland (CCIQ) spokesman Dan Petrie said the value of engineering construction work in the state was half of what it was a decade ago with delays in approving new projects partly to blame.

Mr Petrie said that investment by governments in construction projects such as roads and bridges has remained largely unchanged during the period.

"Interestingly water infrastructure is the area where there has been significant underinvestment, which of course is coming home to roost," Mr Petrie said.

He said the apartment sector was experiencing a glut following an earlier boom in construction activity. "The days of simply slapping up an apartment building and marketing it are long gone," he said. "Buyers have become a lot more discerning."

Ai Group said engineering activity fell amid slow progress on construction sites and a shortage of new contracts to replace completed infrastructure work. Engineering includes government-funded work on roads, bridges and utility supply systems.

House building activity contracted, for a 14th month, but the pace of declines was slowing. The Reserve Bank of Australia last week said home builders were among the businesses facing the greatest difficulties in the country's slowing economy.

"Discretionary retailers, small businesses, some construction firms and those affected by the drought are confronting challenging conditions," the RBA said in its Financial Stability Review publication released last Friday.



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