WA Construction Activity Running Hot

Western Australia State Analysis NovemberConstruction activity in Western Australia is running hot as construction starts in the state reach their highest level so far this year.

Data from construction information service provider BCI Australia indicates that the overall value of commencements in the state during October amounted to $1.990 billion – far higher than for any other month thus far in 2011 (see chart below).

Not surprisingly, civil construction is booming. The value of engineering construction starts last month surged to a whopping $1.602 billion, BCI says. Already strong as a result of the boom in resource investment, civil construction has been boosted from the approval in late September of the $29 billion Wheatstone LNG Project.

Building activity, too, is holding up reasonably well. At $2.537 billion, the seasonally adjusted value of building approvals in the three months to September was virtually unchanged from that in the June quarter ($2.533 billion), according to figures from the Australian Bureau of Statistics (ABS), but was up a respectable 7.07% on the value of approvals in the September quarter last year ($2.358 billion).

Thanks to a tight housing supply, the residential sector is doing well. At $855 million, the value of residential construction starts in the six months to September was more than double that of the previous six months ($340 million), according to BCI figures. Though residential building approvals fell back around mid-year, they have come back since then.

So too is non-residential building. To be sure, at $1.002 billion, the value of non-residential buildings approved during the September quarter was a little down on the June quarter ($1.055 billion), but it was still up a solid 27.94% on the $783.1 million worth of buildings approved in the September quarter last year.

The state’s economy is doing well. According to Commonwealth Securities’ latest State of the States report, Western Australia ranks as the strongest growing economy – although with slowing population growth, the brokerage firm says the gap between WA and other states is narrowing. Seasonally adjusted unemployment remains low at 4.2% (October), according to the ABS – down from 4.4% in August. Retail trade, which has been on the rise every month for six months, his risen by a respectable total of 4.2% since March (ABS).

Whilst the state’s overall labour market remains strong, however, demand for construction workers appears to have eased back for now. The latest ABS figures indicate that a total of 133,600 people were employed in construction in the state in the three months to August (not seasonally adjusted), down from 138,400 in the three months to May.

Western Australia Construction Chart

Key Moving Sectors

Sport/Landscape

With expressions of interest for the Perth Waterfront Project currently being sought and those for the Karratha Town Centre Redevelopment to be sought in January, there is plenty of action in the landscape sector.

Key projects:

  • Karratha Town Centre Redevelopment
  • Perth Waterfront Project

Mining

Buoyed by Wheatstone, activity in mining construction is running hot.

Key projects:

  • Wheatstone Project (LNG)
  • Sino Iron Ore Project
  • Solomon Ore Project
  • Karara Iron Ore Project
  • Prelude FLNG Project (Shell)
  • Balmoral South Iron Ore Project

Transport

As the rail component of the $3.7 billion Perth City Link continues to progress and expressions of interest for the urban precinct relating to the project close this month, there is plenty of activity in the state’s transport sector.

In addition, with the rail link of the troubled Oakajee Port and Rail Project having recently been approved, that project continues to progress. The project, however, remains in doubt as Perth mining company Murchison Metals tries to secure money to fund its share of the development.

Key projects:

  • Perth City Link
  • Oakajee Port and Rail Project

Healthcare

With expressions of interest now open for the New Children’s Hospital in Nedlands to replace the Princess Margret Hospital for Children now open, there are some signs of life in the state’s healthcare sector.

Key projects:

  • New Children’s Hospital
© 2012 DesignBuild Source. All rights Reserved. Reproduction without explicit permission is prohibited.