This article is from the Australian Property Journal archive
BUILDING industry sentiment is changing, according to Davis Langdon's latest Construction Sentiment Monitor.
The Davis Langdon Construction Sentiment Monitor has registered a fall over the past six months, reflecting a growing pessimism in the sector for the first time since the monitor was launched in 2006.
The Davis Langdon index fell 19 points across the first half of 2008 to reach 108 – the first fall recorded since the start of the survey.
Key findings of the survey are that market volatility and the credit crisis are of major concerns to the industry.
The credit squeeze globally and locally has emerged as a significant issue in the construction industry, along with the overall dip in business sentiment.
Whilst skills shortage appears to be easing as an industry concern – down 17% on the last survey – it remains the greatest problem in the industry at the moment.
Concern about costs increased by 4% in the past six months and 10% in the past year and ranked as the second greatest problem facing the industry.
According to David Langdon, the greatest obstacles in building development are include cost of construction, town planning approval, availability of appropriate sites, interest rate volatility and the difficulty of obtaining finance.
The survey found new business activity has dropped off significantly, with fewer firms showing an increase in new business and an increasing proportion indicating no new business or a fall in new business.
The Sentiment Monitor indicated that a large number of businesses expected their workload to decline, and those expecting workload to increase over the next 12 months fell dramatically.
The civil and resource sector is the most likely to contribute to growth, along with health and retirement and aged care.
Retail construction slipped down the list of growth sectors, as did multi unit residential.
Expectations for tourism related construction have plummeted, with 68% of industry players now considering it least likely to contribute to growth in the industry.
Australian Property Journal
