Australia & New Zealand

Transcription

1 Strategy Management Consultancy Australia & New Zealand Regional Analysis k n o w l e d g e c e n t e r 2017 linesight.com/knowledge

2 Contents Australia Australia Market Review 3 Macro indicators 4 Australia key statistics 4 Value of construction output public/private 4 Currency exchange rates 5 Linesight average Australian construction costs Indices 7 Building cost index by capital city 7 Building cost index and consumer price comparison 7 Main Contractors 8 List of tier 1, 2 & 3 contractors 8 Housing 9 Dwelling unit approvals 9 New Zealand New Zealand market review 10 Macro indicators 11 Value of construction output 11 Employment in construction 11 New Zealand key statistics 12 Currency exchange rates 12 Linesight average New Zealand construction costs Housing 14 Residential work by area 14 Dwelling unit commencements 14 Contributors: John Carleton, Rémi Chalon Linesight Australia & New Zealand

3 Australia Market Review Tender prices will increase by between 4 and 5 percent in Melbourne and Sydney, with the remaining capital cities between 2 and 3 percent Overall construction activity has decreased by approximately 10 percent for the year to September Gains made in terms of the value of work done in residential (up 8.3 percent) and general building (up 3.7 percent) have been negated by declines in non-residential (down 4.5 percent) and a significant decrease in engineering (down 23 percent). The reduction in engineering activity has been well documented and although the decrease is significant, it does not come as a surprise because of the sharp decline in resource sector investment. In essence, the Australian market can be split in two the states and territories that are affected by resource activity; Queensland, Western Australia, South Australia and Northern Territory, and those who are to a lesser extent; New South Wales, Victoria, Australian Capital Territory and Tasmania. The construction industry in Sydney and Melbourne is currently going through a strong phase, with the residential sector, in particular, predicted to remain buoyant throughout This is fuelled predominantly by continued population growth and historically low mortgage rates. Concerns in relation to oversupply (especially of apartments and units) are beginning to surface; however, the effect of this will not come to fruition until early 2018 or, maybe not at all if the Reserve Bank of Australia (RBA) decides to raise interests rates in the short term. A number of major urban transport infrastructure projects (rail and road) have commenced in 2016, and activity in the commercial office sector remains buoyant. The data center market is thriving at present, with existing suppliers continuing to build to meet demand from their clients, as well as new players entering the Australian market. All of this activity is putting upward pressure on tender prices, with subcontractors, especially in the services trades, having the ability to choose which projects they submit tenders on. Construction activity is set to remain relatively stagnant in Adelaide, Perth and Brisbane throughout This is likely to be the case in the medium term, or until there is either a revival in commodity prices, leading to resource projects which are currently postponed becoming feasible, or a significant drop in the Australian dollar, which would lead to a revival in the tourism and hospitality sectors. It is expected that tender prices will increase by between 4 and 5 percent in 2017 for Melbourne and Sydney, with the remaining capital cities between 2 and 3 percent. 3 Australia & New Zealand

4 Macro indicators Australia key statistics Units GDP, current prices* AUD$ billions GDP per capita, current prices* AUD$ units Inflation, average consumer prices Annual % change Population Persons, millions Current account balance* AUD$ billions Notes: * Calculated from Sept. to Sept. Source: Australian Bureau of Statistics Value of construction output public/private Sector AUD $m AUD $m AUD $m AUD $m AUD $m AUD $m AUD $m Building Work Residential Private Sector 46,586 47,070 46,652 50,253 57,012 66,101 73,880 Public Sector 3,460 2,127 1, , ,046 49,197 47,772 51,225 57,975 67,187 74,871 Non-Residential Building Private Sector 22,326 22,555 23,967 25,164 26,937 29,650 28,523 Public Sector 17,007 12,320 10,062 10,262 9,532 7,447 8,460 39,333 34,875 34,029 35,427 36,469 37,097 36,983 Total Building 89,379 84,071 81,802 86,651 94, , ,854 Engineering Work Engineering Private Sector 48,791 70, , ,383 95,002 78,676 55,707 Public Sector 29,325 31,626 32,455 31,428 26,775 26,459 29,342 78, , , , , ,135 85,049 Total Construction 167, , , , , , ,903 Note: * Average figures based on Q1, Q2 & Q3 to predict Q4 Source: Australian Bureau of Statistics 4 Australia & New Zealand

5 Currency exchange rates Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct AUD$/USD$ AUD$/EUR Source: European Central Bank 5 Australia & New Zealand

6 Linesight average Australian construction costs 2017 cost range AUD$ from to unit Commercial Offices City Centre Air Conditioned Shell and Core (Low - Medium Rise) 1,500 2,500 per sq.m. Developer Standard (Low - Medium Rise) 2,350 2,750 per sq.m. Shell and Core (Medium - High Rise) 2,550 3,050 per sq.m. Developer Standard (Medium - High Rise) 3,100 4,050 per sq.m. Residential Developer Standard Apartments (medium standard) 1,850 2,350 per sq.m. Developer Standard Apartments (high standard) 2,400 2,950 per sq.m. Leisure Hotel Building (Budget / 3 Star) 2,850 3,500 per sq.m. Hotel Building (4 / 5 Star) 4,100 4,600 per sq.m. Education Primary Level (up to 3 stories, no air conditioning) 1,500 1,900 per sq.m. Car Park Surface 2,600 3,100 per space Multi Storey 20,000 25,500 per space Double Level Basement 27,500 49,000 per space Notes: i All subject to site specifics, design and specification ii All exclude land acquisition costs, external works costs and professional fees iii The above costs are for projects based in Sydney. Regional cost variances occur for projects in Adelaide, Brisbane, Canberra, Melbourne, Hobart & Perth iv Regional variances across the states can vary from -5% to +22% Source: Linesight 6 Australia & New Zealand

7 Indices Building cost index by capital city Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Sydney Canberra Brisbane Melbourne Perth Adelaide Source: Australian Institute of Quantity Surveyors Building cost index and consumer price comparison Oct 05 Feb 06 Jun 06 Oct 06 Feb 07 Jun 07 Oct 07 Feb 08 Jun 08 Oct 08 Feb 09 Jun 09 Oct 09 Feb 10 Jun 10 Oct 10 Feb 11 Jun 11 Oct 11 Feb 12 Jun 12 Oct 12 Feb 13 Jun 13 Oct 13 Feb 14 Jun 14 Oct 14 Feb 15 Jun 15 Oct 15 AIQS BCI CPI Note: AIQS BCI and CPI comparison, March 2016, Australian weighted average Source: AIQS 7 Australia & New Zealand

8 Main contractors List of tier 1, 2 & 3 contractors Tier 1 contractors Lend Lease Baulderstone Pty Ltd. Abigroup CPB Contractors Pty Ltd. (formerly Leighton Contractors Pty Ltd.) Thiess Pty Ltd. John Holland Pty Ltd. Tier 2 & 3 contractors Laing O Rourke Constructions Pty Ltd. Brookfield Multiplex Pty Ltd. Brookfield Global Integrated Solutions 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 Pty Ltd. Probuild Pty Ltd. Taylor Construction Group Pty Ltd. Shape Australia Schiavello Pty Ltd. Richard Crooks Constructions Pty Ltd. Buildcorp Australia Pty Ltd. Source: Linesight 8 Australia & New Zealand

9 Housing Dwelling unit approvals Year New Houses New Other Residential Buildings Total Dwelling Units ,269 49, , ,677 48, , ,515 41, , ,961 69, , ,636 58, , ,035 65, , ,967 80, , ,152 91, , , , , , , ,883 Source: Australian Bureau of Statistics 9 Australia & New Zealand

10 New Zealand Market Review New Zealand s construction industry recorded another remarkable year during 2016, with a 17 percent increase in building activity New Zealand s construction industry recorded another remarkable year during 2016, with a 17 percent increase in building activity up to September. The actual value of all building work for the September 2016 quarter was NZ$5.2 billion, up 22 percent from the same quarter in Auckland and Canterbury continue to be the strongest performers in relation to construction activity, comprising 60 percent of the total value of building work in the September quarter. Activity is driven by demand for residential housing, ongoing earthquake repairs, and investment in infrastructure, healthcare and education facilities. In the North Island area, Auckland is benefiting from the sustained demand for residential properties, which is mainly fuelled by population growth. It is estimated that Auckland requires 10,000 houses per year for the next three decades to resolve the current housing shortages. House prices continued to climb in 2016, which will further fuel inward investment in this sector. The government has also established the Social Housing Reform Program, which aims to build 1,000 houses in Auckland by 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 NZ$16 billion of gross revenues annually. The industry accounts for 9 percent of the workforce, employing an average of 225,000 people annually. The current outlook looks remains very positive for the construction industry in New Zealand, particularly in Auckland and the surrounding suburbs, where demand for residential space is at an all-time high. 10 Australia & New Zealand

11 Macro indicators Value of construction output NZ$m ,000 10,000 8,000 6,000 4,000 2, Residential buildings Non Residential buildings Source: Statistics New Zealand Employment in construction 230, , , , , , , , , Source: Statistics New Zealand 11 Australia & New Zealand

12 New Zealand key statistics Units GDP, current prices NZ$ billions GDP per capita, current prices NZ$ units 70,630 72,304 73,446 76,089 78,542 80,740 Inflation, average consumer prices Annual % change Population Persons, millions Current account balance NZ$ billions Note: Average exchange rate for 2016 used to convert from NZ$ to US$ Source: Currency exchange rates Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct NZD$/AUD$ NZD$/USD$ NZD$/EUR Source: European Central Bank 12 Australia & New Zealand

13 Linesight average New Zealand construction costs 2017 cost range NZ$ from to unit Commercial Offices City Centre Air Conditioned Shell and Core (Low - Medium Rise) 1,850 2,100 per sq.m. Developer Standard (Low - Medium Rise) 2,400 3,400 per sq.m. Shell and Core (Medium - High Rise) 2,600 3,100 per sq.m. Developer Standard (Medium - High Rise) 3,000 3,900 per sq.m. Residential Developer Standard Apartments (medium standard) 2,150 2,850 per sq.m. Developer Standard Apartments (high standard) 2,700 3,400 per sq.m. Leisure Hotel Building (Budget / 3 Star) 3,300 3,950 per sq.m. Hotel Building (4 / 5 Star) 4,250 5,300 per sq.m. Education Primary Level (up to 3 stories, no Air conditioning) 1,900 2,300 per sq.m. Car Park Surface 3,100 4,200 per space Multi Storey 22,000 26,500 per space Double Level Basement 31,500 33,500 per space Notes: i All subject to site specifics, design and specification ii All exclude land acquisition costs, external works costs and professional fees iii 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 13 Australia & New Zealand

14 Housing Residential work by area $bn Auckland Waikato Wellington Rest of North Island Canterbury Rest of South Island Note: September quarter actual values Source: Statistics New Zealand Dwelling unit commencements Year Apartments, townhouses, flats and units Houses Total ,298 16,158 18, ,449 12,976 14, ,701 13,066 14, ,483 11,112 12, ,816 13,733 15, ,262 16,721 19, ,441 18,359 22, ,195 19,038 25, ,804 21,310 28,114 Source: Statistics New Zealand 14 Australia & New Zealand

15 Australia Level George Street Sydney NSW 2000 Australia T: John Carleton john.carleton@linesight.com