Australia & New Zealand

Transcription

1 Strategy Management Consultancy Australia & New Zealand Regional Analysis 2016 k n o w l e d g e c e n t e r Linesight Knowledge Center linesight.com

2 Contents Australia Market Review 3 Australia Key Statistics 3 Value of Construction Output (AUD$); Australia 4 Trend in Australian Construction Output by Sector Building Cost Index by Capital City 5 Building Cost Index & Consumer Price Comparison 5 Dwelling Unit Approvals 6 Average Construction Costs 2016 Australia 6 List of Tier 1, 2 & 3 Contractors 7 Currency Exchange Rates 7 New Zealand Market Review 8 New Zealand Key Statistics 8 Value of Construction Output (NZ$m ) 9 All Building Work by area; New Zealand 9 Numbers Employed in Construction (000s) Dwelling Unit Commencements 10 Average Construction Costs 2016 New Zealand 11 Currency Exchange Rates (NZD$) 11 Contributors to the Australia and New Zealand section of Knowledge Centre 2016: John Carleton, Brian Collins, Seamus Fitzmaurice Linesight Australia & New Zealand

3 Australia Market Review A resurgence in commercial and residential building activity has proven to be a timely respite from the mining industries woes. Overall construction activity increased in 2015 by approximately 1% which has left the Australian construction industry cautiously optimistic that this trend can be repeated in Any hopes for more significant gains have been tempered by the sharp decline in resource sector investment during The collapse of commodity prices dealt a further blow to the industry and as a result mining activity is expected to weaken further in the next 12 months. Queensland, Western Australia and the Northern Territory will continue to be most affected by this decline. A resurgence in commercial and residential building activity has proven to be a timely respite from the mining industry s woes. Activity in these sectors is predicted to remain buoyant throughout 2016, fuelled mainly by continued population growth, historically low mortgage rates and overseas investment. The cities of Sydney, Brisbane and Melbourne are benefiting most from this increase in activity. The record number of building approvals in the past year demonstrates a continued demand in the residential market. Engineering construction projects are also due to play their role in maintaining overall construction at current levels. The growth of major urban transport infrastructure (rail and road) and telecommunications infrastructure through the ongoing roll out of Australia s new broadband network are expected to contribute the most. Construction prices remained competitive throughout It is notable that due to the increased demand in the residential and commercial sectors, some key trades are experiencing higher tender price escalation than that of the wider industry. Consequently it is expected that tender prices will increase by 3.0% in 2016 as contractors continue to operate with healthy order books. Australia Key Statistics Units GDP, current prices U.S. $ Billions GDP per capita, current prices U.S. $ Units 48,293 46,545 41,576 53,169 49,081 Inflation, average consumer prices Annual % change Population Persons, Millions Current account balance U.S. $ Billions Source Australian Bureau of Statistics 3 Australia & New Zealand

4 Value of Construction Output (AUD$); Australia Sector Building Work * AUD $m AUD $m AUD $m AUD $m AUD $m AUD $m Residential Private Sector 44,447 Public Sector 2,733 47,180 45,708 44,431 48,384 56,757 64,055 Non-Residential Building Private Sector 19,657 Public Sector 14,497 34,154 32,085 32,152 34,014 35,767 35,513 Total Building 81,333 77,794 76,583 82,398 92,524 99,568 Engineering Work Private Sector 50,402 72,566 97,533 96,821 90,491 76,949 Public Sector 31,927 33,759 33,706 31,306 25,911 24,975 82, , , ,123 89, ,925 Total Construction 165, , , , , ,493 Note * Average figures based on Q1,Q2 & Q3 Source Australian Bureau of Statistics Trend in Australian Construction Output by Sector % pa Average Growth Rates Residential Non-Residential Infrastructure Total Source Global Construction Perspectives & Oxford Economics 4 Australia & New Zealand

5 Building Cost Index by Capital City Jan 09 Apr 09 Jul 09 Oct 09 Jan 10 Apr 10 Jul 10 Oct 10 Jan 11 Apr 11 Jul 11 Oct 11 Jan 12 Apr 12 Jul 12 Oct 12 Jan 13 Apr 13 Jul 13 Oct 13 Jan 14 Apr 14 Jul 14 Oct 14 Jan 15 Apr 15 Jul 15 Oct 15 Jan 16 Adelaide Brisbane Canberra Melbourne Perth Sydney Source Australian Institute of Quantity Surveyors Building Cost Index & Consumer Price Comparison Jul 04 Nov 04 Mar 05 Jul 05 Nov 05 Mar 06 Jul 06 Nov 06 Mar 07 Jul 07 Nov 07 Mar 08 Jul 08 Nov 08 Mar 09 Jul 09 Nov 09 Mar 10 Jul 10 Nov 10 Mar 11 Jul 11 Nov 11 Mar 12 July 12 Nov 12 Mar 13 Jul 13 Nov 13 Mar 14 Jul 14 CPI AIQS BCI Source Australian Institute of Quantity Surveyors 5 Australia & New Zealand

6 Dwelling Unit Approvals Year New Houses New Other Residential Buildings Total Dwelling Units ,953 38, , ,177 52, , ,961 69, , ,687 58, , ,670 63, , ,873 79, , ,989 89, , * 117, , ,904 * = Includes average figure for December based on year to date. Source Australian Bureau of Statistics Average Construction Costs 2016 Australia Commercial Offices City Centre Air Conditioned Shell & Core (Low Medium Rise) 1,500 2,500 Developer Standard (Low Medium Rise) 2,350 2,750 Shell & Core (Medium High Rise) 2,550 3,050 Developer Standard (Medium High Rise) 3,100 4,050 Residential Developer Standard Apartments (Medium standard) 1,850 2,350 Developer Standard Apartments (High standard) 2,400 2,950 Leisure Hotel Building (Budget / 3 Star) 2,850 3,500 Hotel Building (4 / 5 Star) 4,100 4,600 Education Primary Level (up to 3 storeys, no air conditioning) 1,500 1,850 Car Park Surface 2,600 3,100 Multi Storey 20,000 25,500 Double Level Basement 27,500 49,000 i. ii. iii. iv. All subject to site specifics, design and specification All exclude Land Acquisition Costs, External Works Costs & Professional Fees The above costs are for projects based in Sydney. Regional cost variances occur for projects in Adelaide, Brisbane, Canberra, Melbourne, Hobart & Perth Regional variances across the states can vary from -5% to +22% Source AIQS / Linesight 6 Australia & New Zealand

7 List of Tier 1, 2 & 3 Contractors Tier 1 Contractors Lend Lease Group Brookfield Multiplex Pty Ltd Laing O Rourke Constructions Pty Ltd BGC Australia Pty Ltd Theiss Pty Ltd CPB Contractors (formerly Leighton Contractors Ltd Probuild Pty Ltd John Holland Pty Ltd Tier 2 & 3 Contractors Watpac Pty Ltd Hansen Yuncken Pty Ltd Built Pty Ltd ADCO Constructions Pty Ltd Grocon Pty Ltd Downer EDI Works Pty Ltd J Hutchinson Pty Ltd ICON Construction Australia Patterson Building Group FDC Construction & Fit Out Pty Ltd Cockram Currency Exchange Rates Jan 10 Apr 10 Jul 10 Oct 10 Jan 11 Apr 11 Jul 11 Oct 11 Jan 12 Apr 12 Jul 12 Oct 12 Jan 13 Apr 13 Jul 13 Oct 13 Jan 14 Apr 14 Jul 14 Oct 14 Jan 15 Apr 15 Jul 15 Oct 15 Jan 16 AUD$/USD$ AUD$/EUR Source European Central Bank 7 Australia & New Zealand

8 New Zealand Market Review construction is one of the largest sectors generating approximately $16 billion of gross revenues annually was a solid year for New Zealand s economy with a 2.3% increase in economic activity recorded in the first three quarters of the year. Auckland and Christchurch continue to grab the headlines in relation to construction. Of the total value of building work carried out during 2015, approximately 60% came from these two regions. Activity is driven by demand for residential housing, ongoing earthquake repairs and sustained population growth. In the North Island, Auckland is benefitting from the sustained demand for residential properties. It is estimated that Auckland requires 10,000 houses per year for the next three decades to resolve the current housing shortages. House prices grew in excess of 10% during 2015, which will further fuel investment in this sector. In the South Island, the Christchurch and Canterbury region rebuild is still the focus of construction work. Overall, construction is one of the largest sectors in the New Zealand economy, generating approximately $16 billion of gross revenues annually. The construction industry accounts for 7% of the workforce, employing on average 171,000 people annually. However, it is worth noting that as of 2015, manufacturing has overtaken construction as the main source of employment in the country. The current outlook for the New Zealand construction industry remains positive for New Zealand Key Statistics Units GDP, current prices U.S. $ Billions GDP per capita, current prices U.S. $ Units 29,649 30,873 31,795 32,375 34,206 34,513 Inflation, average consumer prices Annual % change Population Persons, Millions Current account balance U.S. $ Billions Note Average exchange rate for 2015 used to convert from NZ$ to US$ Source 8 Australia & New Zealand

9 Value of Construction Output (NZ$m ) * Residential building Non-Residential building * Based on third quarter Source Statistics New Zealand All Building Work by area; New Zealand NZ$ (billion) Auckland Waikato Wellington Rest of North Island Canterbury Rest of South Island Source Statistics New Zealand 9 Australia & New Zealand

10 Numbers Employed in Construction (000s) * *Based on third quarter Source Dwelling Unit Commencements Year Apartments, townhouses, flats and units Houses Total ,298 16,158 18, ,449 12,976 14, ,663 15, ,156 12,506 13, ,749 15,180 16, ,408 18,892 21, ,441 18,359 22, * 5,884 18,823 24,707 *2015 year end November Source 10 Australia & New Zealand

11 Average Construction Costs 2016 New Zealand Cost Range NZ$ Commercial Offices City Centre Air Conditioned Shell & Core (Low Medium Rise) From 1,850 To 2,100 Unit Developer Standard (Low Medium Rise) 2,400 3,400 Shell & Core (Medium High Rise) 2,600 3,100 Developer Standard (Medium High Rise) 3,000 3,900 Residential Developer Standard Apartments (medium standard) 2,150 2,850 Developer Standard Apartments (high standard) 2,700 3,400 Leisure Hotel Building (Budget / 3 Star) 3,300 3,950 Hotel Building (4 / 5 Star) 4,250 5,300 Education Primary Level (up to 3 stories, no air conditioning) 1,900 2,300 Car Park Surface 3,100 4,200 Multi Storey 22,000 26,500 Double Level Basement 31,500 33,500 i. ii. iii. All subject to site specifics, design and specification All exclude Land Acquisition Costs, External Works Costs & Professional Fees The above costs are for projects based in Auckland. Regional cost variances occur for projects in Waikato / Bay of Plenty, Wellington, Remainder of North Island, Canterbury & Remainder of South Island Source Linesight Currency Exchange Rates (NZD$) Jan 09 Apr 09 Jul 09 Oct 09 Jan 10 Apr 10 Jul 10 Oct 10 Jan 11 Apr 11 Jul 11 Oct 11 Jan 12 Apr 12 Jul 12 Oct 12 Jan 13 Apr 13 Jul 13 Oct 13 Jan 14 Apr 14 Jul 14 Oct 14 Jan 15 Apr 15 Jul 15 Oct 15 Jan 16 NZD$/AUD$ NZD$/USD$ NZD$/EUR Source European Central Bank 11 Australia & New Zealand