Construction Market Report South Australia and Adelaide

18 Pages·2012·4.56 MB·English

by  Pia Argiratos

Construction Market Report
South Australia and Adelaide
October 2012
Construction Market Report for South Australia and Adelaide October 2012
2 Copyright © 2012 Australian Construction Industry Forum www.acif.com.au
This South Australia Construction Market Report is based on the data and analysis from the October update to the
ACIF Forecasts. It brings together the data and commentary from Kerry Barwise and Dan Bunting, two of the Allen
Consulting Group team who prepared and presented the update at the ACIF Briefing in Adelaide.
Overall, while there are significant risks to the outlook, the moderate growth in prospects for the Australian economy
supports moderate growth in construction activity at large.
Our multispeed economy is driving different rates in building and construction. Residential is still subdued, but is
projected to rebound based on the fundamentals of growing population and low interest rates.
Construction activity in South Australia grows over the forecast period, although the outlook for growth has
moderated. The electricity sector continues to be a major driver of engineering activity. Residential building is to pick
up in the medium term. Hospitals are to remain a major source of non-residential building activity.
Construction activity in South Australia is projected to contract by 3 per cent over the next year, but will achieve
modest real growth in the medium to longer term.
The pattern of growth is different than elsewhere and growth is also distributed differently between different
construction industry sectors.
As always, we are grateful for the support of loyal sponsors.
The industry's super fund cbus is generous with its funding and support which makes it possible for ACIF to produce
the ACIF Forecasts and these Construction Market Reports.
Cordell Information has been part of this work since it started in 2002, and we are grateful to all at Cordell who help
us to make this happen.
The Property Council of Australia, the Australian Institute of Architects and Engineers Australia each make a
significant financial contribution. We are grateful for their continued support.

Platinum Sponsor
Cbus has a proud history as one of Australia's first industry funds
Established in 1984 to provide superannuation services for members
of the building, construction and allied industries, their families and
employers, Cbus today is one of Australia’s leading industry
superannuation funds.
Driven by a core commitment to maximise returns to members, and
not profits to shareholders, Cbus has a membership of more than
655,000 industry and general public members, and 75,000 employers.

Silver Sponsors

Construction Market Report for South Australia and Adelaide October 2012
This ACIF Construction Market Report uses information derived from the October 2012 update to the ACIF
Forecasts. The development of these state level reports responds to the industry’s request for more detailed
information on demand closer to home, keeping in mind the national outlook, but explaining the forecast for each
state with more information about the drivers of change and the macro and international factors that affect each
individual state.
ACIF Forecasts are the industry’s ‘compass’ to the future, rolling ten year forecasts of demand across residential,
non residential and engineering construction. Forecasts are prepared by respected economic modellers
Allen Consulting Group and overseen by ACIF’s Construction Forecasting Council, an industry panel of expert
analysts and researchers. Construction Forecasting Council is chaired by Peter Verwer, CEO of Property Council of
Australia.
ACIF Forecasts are used by thousands of professionals each year across the full range of stakeholders, from major
organisations to small consultancies. Updates to the ACIF Forecasts are released first at ACIF Briefings held around
Australia in April and October.
More information about ACIF Forecasts is available from www.acif.com.au/forecasts.

Construction Market Reports are available at www.acif.com.au/shop:
Construction Market Report – Queensland and Brisbane
Construction Market Report – New South Wales and Sydney
Construction Market Report – Australian Capital Territory and Canberra
Construction Market Report – Victoria and Melbourne
Construction Market Report – South Australia and Adelaide
Construction Market Report – Western Australia and Perth

Australian Construction Industry Forum
GPO Box 1691
Canberra ACT 2601
Phone [phone]
Fax [phone]
Email [email protected]
Website www.acif.com.au
Executive Director: Peter Barda
Event Manager: Jill Barda
Marketing Manager: Pia Argiratos

Copyright © 2012 Australian Construction Industry Forum
Product code: CMR201210_SA
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means
electronic, mechanical, photocopying, recording or otherwise without the prior written permission of Australian Construction Industry Forum.
Cover image: photo by Diego Cervo , Milan, Italy.
2 Copyright © 2012 Australian Construction Industry Forum www.acif.com.au
Foreword 1
About Australian Construction Industry Forum 5
About ACIF Forecasts 6
The Big Picture 9
Construction Industry at Large 11
Residential Building 13
Non Residential Building 14
Engineering Construction 15
South Australia and Adelaide 21
Residential Building 23
Non Residential Building 24
Engineering Construction 25
Data Sources and Methodology 27
Appendix: ABS Asset types definitions 28
Construction Market Report for South Australia and Adelaide October 2012 3
4 Copyright © 2012 Australian Construction Industry Forum www.acif.com.au
The Australian Construction Industry Forum (ACIF) is the meeting place for leaders of the construction industry in
Australia. ACIF facilitates and supports an active dialogue between the key players in residential and non-residential
building, engineering construction, other industry groups, and government agencies.
Our members are the most significant Associations in the industry, spanning the entire asset creation process from
feasibility through design, cost planning, construction, building and management.
ACIF also provides a number of resources for the industry, including twice yearly ACIF Briefings, a directory of key
organisations and consumer resources, as well as industry-wide policies and productivity tools.
ACIF is focused on creating a competitive construction and property industry that is a leader in building Australia’s
prosperity. As well as facilitating communication between the different interests that make up the construction sector,
ACIF provides governments and other agencies with a central and efficient industry liaison point.
ACIF harnesses the energies of its members to provide leadership and facilitate change within the industry, to
increase productivity, efficiency, research and innovation. ACIF is governed by a Board of Directors comprising
senior practitioners and chief executives of its member organisations. A secretariat supports the Board and the
working groups tasked with developing policies and productivity tools.
ACIF seeks to develop a successful, strong and sustainable construction industry in Australia. To do so, ACIF has
adopted a set of objectives and matching key performance indicators that:
 create a more informed, innovative and skilled market place;
 create a more attractive industry for employees, employers and capital providers;
 foster a more collaborative approach to sharing risks and returns;
 enhance the quality of Australia’s built environment, including design quality;
 achieve a sustainable industry where green is the norm;
 encourage the evolution of the property investment and infrastructure asset classes;
 eliminate barriers to competitiveness caused by poor public policy frameworks and implementation silos; and
 foster research and development.
Airconditioning and Mechanical Contractors Association Engineers Australia
Association of Consulting Architects Fire Protection Association
Australian Constructors Association Housing Industry Association
Australian Institute of Architects Master Builders Australia
Australian Institute of Building National Electrical and Communications Association
Australian Institute of Building Surveyors National Fire Industry Association
Australian Institute of Quantity Surveyors National Precast Concrete Association
Construction Market Report for South Australia and Adelaide October 2012 5
ACIF Forecasts are a primary source of market information for the building and
construction industry in Australia. Developed by ACIF’s Construction Forecasting
Council, ACIF Forecasts provide decision makers with a reliable and highly
accurate compass for planning.
ACIF Forecasts are rolling ten year forecasts of demand that have been helping organisations of all sizes since 2002.
They use the ACIF Forecasts as one of their key business development and strategic planning tools. The information
points to the sources, types, and value of work across all three sectors, and most asset types.
Residential Building Non-Residential Building Engineering Construction
 Houses  Retail/wholesale  Roads
 Apartments  Offices  Rail, ports, harbours
 Major alterations and  Industrial  Electricity, pipelines
additions
 Health, aged care  Water, sewerage
 Minor alterations and
 Accommodation  Telecommunications
additions
 Education  Mining
 Entertainment  Recreation
 Miscellaneous
The ACIF Forecasts are developed by the Allen Consulting Group using data from the Australian Bureau of Statistics,
Deloitte Access Economics and Cordell Information. Initial forecasts are reviewed by the Construction Forecasting
Council's industry experts.
For the first time, the ACIF Forecasts are being reported in terms of real value instead of nominal value (current
prices). Real values provide a superior indication of whether each segment of construction activity is growing or
contracting by removing the effects of the changes in overall price levels in the economy.
While nominal values provide an indicator of the actual dollar value of construction that is expected to occur in the
future, the effect of price changes may mask the actual trends in activity in the sector.
In fact, nominal values tend to grow even when real activity levels are declining due to the effect of changes in prices
on reported nominal values. Nominal values may provide a misleading indicator of the future direction of the industry.
Nominal values may still be calculated from the real values reported by applying the appropriate implicit price
deflators reported for each category of construction activity. A separate deflator has been reported for residential
building, non-residential building and engineering construction.
More information on data sources, definitions and methodology are in the Data Sources and Methodology section of
this report.
6 Copyright © 2012 Australian Construction Industry Forum www.acif.com.au
ACIF's Construction Forecasting Council is a panel of economists and industry leaders whose role is to review and
provide input to the data that forms the ACIF Forecasts. Both the wealth of professional experience of the members
of the Construction Forecasting Council and the unique insight from their respective organisations that ensures that
ACIF Forecasts are the most credible forecasts of demand for the construction industry in Australia.
Peter Verwer Property Council of Australia John Freedman Lend Lease
Peter Jones Master Builders Association Anthony Mills Deakin University
Richard Barton Australian Institute of Architects Sean Leonard cbus
Geoff Bills Economic Consultant John Nhan Nguyen Property Council of Australia
Chris Bulmer Hansen Yuncken David Rees Jones Lang Lasalle
Rod Cornish Macquarie Rob Wild Cordell
Harley Dale Housing Industry Association Peter Barda ACIF

For DesignBUILD, the ACIF Briefings are integral dates on our calendar, as the ACIF Forecasts provide up to date
and relevant statistical data, giving us information required to plan events / exhibitions for the best-benefit of the
industry nationally and regionally. They also provide a valuable opportunity to network with thought leaders and
C-Level executives throughout the country, rather than just in one city.
Frank Matus, Exhibition Manager, DesignBUILD Expo
Many of our members have recently started to use the ACIF Forecasts to help them plan how and when to invest in
their business. Without these Forecasts, many smaller businesses would be making big decisions without the benefit
of reliable industry data. ACIF Forecasts are an important industry resource
“
and we encourage all businesses to attend the ACIF Briefings and to use the
ACIF Forecasts online.
Peter Golding, CEO, Galvanizers Association of Australia
ACIF Forecasts are of great assistance to the Australian Institute of Building
and our members. The Forecasts provide reliable, accurate and concise
data, which is used to inform and provide a picture of future construction
activity. While data from the Australian Bureau of Statistics provides
information on past construction activity, the ACIF Forecasts go a step
further, and boldly give industry stakeholders an idea of what the future may
”

bring. We thank and commend ACIF for providing this invaluable service.
Robert Hunt, Chief Executive Officer, Australian Institute of Building
ACIF Forecasts have proven invaluable across a range of Engineers Australia's policy development and analytical
activities. It is critical that our policy positions are backed by rigour and a strong and reliable evidence base.
ACIF Forecasts provide Engineers Australia with a trustworthy, reliable and impartial source of industry data. With
their proven track record, ACIF Forecasts will continue to be an essential tool in our analytical capability.
Brent Jackson, Director International and National Policy, Engineers Australia
Construction Market Report for South Australia and Adelaide October 2012 7
8 Copyright © 2012 Australian Construction Industry Forum www.acif.com.au