Surveyor remain optimistic

QUANTITY surveyors expect future workloads to continue rising over the next 12-months, according to the December quarter Westpac/AIQS BRIX survey.

According to the survey, the level of confidence peaks in the June 2007 quarter, with a net balance of 45% of respondents expecting workloads to increase.

As usual, confidence is lowest in the fourth quarter of the survey period in December 2007 with a net balance of 35% of respondents expecting workloads to increase. However, optimism was very stable across all four quarters.

In the December survey, sentiment improved in all quarters except the second quarter, when compared to the September survey. However sentiment in quarter two was only three basis points lower in the December survey period than in the September survey period.

Respondents from South Australia were the most positive over all four quarters. However the sample size for South Australia in the December survey was very small.

Of the other four major markets, respondents from Victoria were the most optimistic in the first two quarters of the survey period, with Queensland respondents the most positive in the final two quarters.

Respondents from Western Australian declines significantly falling from a net balance of 57% of respondents expecting to workloads to increases in the first quarter to a net balance of just 14% expecting workloads to increases in the third and fourth quarters of the survey

At no stage during the survey period did a net balance of respondents in any state expect workloads to fall.

Building costs are still rising, with QSs reporting growth of 6.5% in the year to December 2006, higher than the estimate of 5.5% QSs forecast a year ago. This rate of growth is also the highest reported since the September 2005 survey.

QSs expect future building costs to continue rising at around 6.3% over the year to December 2007. This is the highest estimate of building price growth since the March 2005 survey. Of the major states, NSW is expecting the smallest rate of growth at 4.1% with WA to have the largest at 10.7%.

In the December survey, a net balance of respondents expect workloads to increase in all phases of the construction cycle over the next 12 months.

The only phase of the cycle where the level of optimism declined since the September survey was ‘tax and insurance’. The most positive phase of the cycle was ‘cost planning’, where a net balance of 63% of respondents expected workload to increase over the next 12 months.

The overall level of activity ranged from positive net balance of 3% in hotels to 48% in engineering. However, in the hotel sector a net balance of 25% of respondents in NSW and 33% in South Australia indicated that workloads had fallen over the quarter.

Retail and factories were the only sectors where the level of activity was lower in the December survey than in the September survey. In both cases this was driven by respondents in New South Wales.

Australian Property Journal