Queensland regional construction supply and demand analysis: … · 2019. 11. 14. · 2.10 Housing...

Queensland regional construction supply and demand analysis:

1993-2022 and quarterly indicators to June 2014

A report for the Department of Housing and Public Works

Prepared by the National Institute of Economic and Industry Research ABN: 72 006 234 626 416 Queens Parade, Clifton Hill, Victoria, 3068 Telephone: (03) 9488 8444; Facsimile: (03) 9482 3262 Email: [email protected]

August 2012

While the National Institute endeavours to provide reliable forecasts and believes the material is accurate, it will not be liable for any claim by any party acting on such information.

Contents

Page no.

Executive summary i

1. Introduction 1

2. The economic outlook for the world, Australia and Queensland to 2020 2

2.1 The world economy 3 2.1.1 The Euro Zone 3 2.1.2 Towards sustainable policies 3 2.1.3 The United States 4 2.1.4 China 6 2.1.5 Oil prices and inflation 7 2.2 The Australian economic outlook 11 2.2.1 The general growth outlook 11 2.2.2 Other negative structural trends 13 2.2.3 Dutch Disease 13 2.2.4 GDP formation 13 2.2.5 Consumption expenditure 14 2.2.6 Other GDP demand components 15 2.2.7 The balance of payments 15 2.2.8 The exchange rate 16 2.2.9 Population 16 2.2.10 Interest rates 16 2.2.11 Employment and unemployment 17 2.3 The Queensland economic outlook 23 2.4 Housing 27

3. Queensland construction activity in the Australian context 33

3.1 Queensland construction: The headline outcomes 33 3.2 Total construction: A comparison with last year’s Annual Report 34 3.3 The Queensland dwelling market 34 3.3.1 New dwelling construction post 2013 35 3.3.2 Other renovations expenditure 36 3.3.3 Total Queensland private dwelling construction expenditures 36 3.4 Non-residential building 39 3.4.1 Private non-residential building 39 3.4.2 Public non-residential building activity 42 3.4.3 Major Queensland non-residential building projects 43 3.4.4 Total non-residential building activity 44 3.5 Engineering construction 45 3.5.1 Engineering: the general profile to 2022 45 3.5.2 Queensland mining investment and activity 46 3.5.3 Major Queensland engineering projects 49 3.5.4 Other engineering segments 51 3.5.5 Private and public engineering expenditure 51 3.6 Queensland’s construction share of total Australian construction 51

Contents (cont.)

Page no.

3. Continued

3.7 The regional dimension 61 3.7.1 The regional dimension – a macro view 61 3.7.2 The regional construction growth dynamics 62 3.7.3 Regional construction activity profile – Brisbane 62 3.7.4 Regional construction activity profile – Gold Coast 63 3.7.5 Regional construction activity profile – Sunshine Coast 64 3.7.6 Regional construction activity profile – West Moreton 64 3.7.5 Regional construction activity profile – Darling Downs 64 3.7.6 Regional construction activity profile – Northern region 65 3.7.7 Regional construction activity profile – the Far North region 65

4. Queensland construction: resources, capacity and price pressures 82

4.1 Utilisation of capacity 82 4.2 Labour shortage/surplus 82 4.3 Cost pressure 83

5. Quarterly profiles 91

Appendix A: Additional annual tables 100

Appendix B: Methodology – the formation of capacity in Queensland construction 112

Appendix C: The forecast methodology 116

Appendix D: Total construction activity aggregates including estimates of other work done in residential activity and share tables by expenditure component 119

Appendix E: Additional quarterly tables 126

Appendix F: Regional construction profiles – Per capita expenditure tables 138

Appendix G: The results of a selected Survey of representatives of the Queensland Department of Housing and Public Works Regional Managers 145

Appendix H: Major projects taken into account in developing the regional projections 176

List of tables

Page no. E.1 Australia and Queensland gross product and construction activity indicators v E.2 Annual growth and % contribution to construction activity by major construction segment vi E.3 Construction activity by Queensland region vi E.4 Share of total construction activity by Queensland region vi E.5 Total construction – average annual growth rates by Queensland regions vii E.6 Drivers of construction growth by Queensland region 2011-2022 vii E.7 Shortage of construction labour by Queensland region viii E.8 Queensland construction industry – real quarterly price growth at annual rates viii

2.1 Annual real GDP growth rates by country 9 2.2 Australian GDP demand side GDP formation in $CVM – growth rates 20 2.3 Formation of Australian current account balance 22 2.4 Formation of Queensland Gross State Product 25 2.5 Formation of Queensland population 26 2.6 Average annual population change by region 27 2.7 Housing – Brisbane City 29 2.8 Housing – Gold Coast 30 2.9 Housing – Sunshine Coast 30 2.10 Housing – West Moreton 30 2.11 Housing – Wide Bay-Burnett 31 2.12 Housing – Darling Downs South West 31 2.13 Housing – Fitzroy Central West 31 2.14 Housing – Mackay 32 2.15 Housing – Far North 32 2.16 Housing – North West 32

3.1 Australia and Queensland construction industry activity – value of work done 54 3.2(a) Queensland construction industry activity – value of work done 56 3.2(b) Fiscal year construction activity growth rates – Queensland CVM construction activity indicators 57 3.2(c) Fiscal year construction activity indicator contribution to total Queensland construction growth rate 58 3.3 Annual growth and % contribution to Queensland construction activity by major construction segment 59 3.4 Sector contribution to Queensland engineering construction growth 60 3.5 Formation of construction in Brisbane 73 3.6 Formation of construction in Gold Coast 73 3.7 Formation of construction in Sunshine Coast 74 3.8 Formation of construction in West Moreton 74 3.9 Formation of construction in Wide Bay/Burnett 75 3.10 Formation of construction in Darling Downs 75 3.11 Formation of construction in South West 76 3.12 Formation of construction in Fitzroy 76 3.13 Formation of construction in Central West 77

List of tables (cont.)

Page no.

3.14 Formation of construction in Mackay 77 3.15 Formation of construction in Northern 78 3.16 Formation of construction in Far North 78 3.17 Formation of construction in North West 79 3.18 Total construction: average annual growth rates by Queensland regions 80 3.19 Drivers of construction growth by Queensland region 2011-2022 80 3.20 Contribution of each region to Queensland construction growth 81

4.1 Unutilised capacity in Queensland and Australian construction sectors 86 4.2 Construction industry employment by Queensland regions 86 4.3 Queensland regional construction excess capacity utilisation rates 87 4.4 Queensland regional construction – excess demand of labour 87 4.5 Queensland regional construction – level of activity increase in economic capacity 88 4.6 Regional construction industry employment by 3-digit ANZSIC industry 88

5.1 Value of work done: Residential new construction 92 5.2 Value of work done: Non-residential building by region 93 5.3 Value of work done: Residential other renovations by region 94 5.4 Value of work done: Residential building by region 95 5.5 Value of work done: Total engineering construction activity by region 96 5.6 Value of work done: Total construction activity by region ($ million) 97 5.7 Value of work done: Total construction activity by region 98 5.8 Queensland construction industry – real quarterly price growth at annual rates 99 5.9 Shortage of construction labour by Queensland region 99

A.1 Total regional population 101 A.2 Share of regional population in total Queensland population 101 A.3(a) Total Queensland construction by region – share of residential activity in total regional activity 102 A.3(b) Total Queensland construction by region – share of non-residential activity in total regional activity 102 A.3(c) Total Queensland construction by region – share of total engineering activity in total regional activity 103 A.4 Share of public expenditures in regional total expenditures 103 A.5(a) Queensland construction by region – share of public residential expenditure in total regional residential expenditure 104 A.5(b) Queensland construction by region – share of public non-residential building expenditure in total regional non-residential building expenditure 104

A.5(c) Queensland construction by region – share of public engineering in total regional engineering expenditure (including Commonwealth) 105 A.6 Queensland regional construction value of work done: Private housing expenditure on new construction and alterations (excluding other work done) 105


Page no.

A.7 Queensland regional construction value of work done: Public housing 106 A.8 Queensland regional construction value of work done: Non-residential building private 106 A.9 Queensland regional construction value of work done: Non-residential building public 107 A.10 Queensland regional construction value of work done: Private engineering 107 A.11 Queensland regional construction value of work done: Public engineering 108 A.12 Queensland regional construction value of work done: Non-residential building total 108 A.13 Queensland regional construction value of work done: Engineering total 109 A.14 Queensland regional construction value of work done: Total residential (excluding other work done) 109 A.15 Queensland regional construction value of work done: Total public sector engineering (including Commonwealth) 110 A.16 Queensland regional construction value of work done: Private residential (other work done) 110 A.17 Queensland regional construction value of work done: Total construction 111 A.18 Queensland regional construction value of work done: Total construction expenditure share of State total 111

C.1 The LGA membership of construction zones by State 118

D.1 Total residential construction including estimates of other work done 120 D.2 Total Queensland construction including estimates of other residential work done 120 D.3 Share of residential activity in total regional activity 121 D.4 Share of residential activity in total Queensland residential activity 121 D.5 Share of total regional activity in total Queensland total activity 122 D.6 Share of regional engineering activity in total Queensland regional activity 122 D.7 Share of regional non-residential building activity in total regional total activity 123 D.8 Share of regional public expenditure activity in total regional total activity 123 D.9 Share of regional public housing expenditure activity in total regional housing activity 124 D.10 Share of regional public non-residential building expenditure activity in total regional non-residential building activity 124 D.11 Share of regional engineering expenditure activity in total regional engineering activity 125


Page no.

E.1 Private dwelling value of work done: new construction (including alterations and additions) 127 E.2 Private dwelling: other value of work done 128 E.3 Private dwelling: total value of work done 129 E.4 Private non-residential building value of work done 130 E.5 Public non-residential building value of work done 131 E.6 Total non-residential building value of work done 132 E.7 Non-Queensland Government engineering value of work done 133 E.8 Queensland Government engineering value of work done 134 E.9 Total engineering value of work done 135 E.10 Public dwelling value of work done 136 E.11 Total construction: value of work done 137

F.1 Per capita expenditure – private dwelling expenditure (excluding other work done) 139 F.2 Per capita expenditure – public dwelling expenditure 139 F.3 Per capita expenditure – private dwelling expenditure (other work done) 140 F.4 Per capita expenditure – total dwelling expenditure 140 F.5 Per capita expenditure – private expenditure non-residential building 141 F.6 Per capita expenditure – public expenditure non-residential building 141 F.7 Per capita expenditure – total expenditure non-residential building 142 F.8 Per capita expenditure – private engineering expenditure 142 F.9 Per capita expenditure – public engineering expenditure 143 F.10 Per capita expenditure – total engineering expenditure 143 F.11 Per capita expenditure – total construction expenditure 144

List of figures

Page no.

E.1 Australian GDP and Queensland GSP v

2.1 World GDP 7 2.2 World inflation 8 2.3 Nominal and real wages growth and CPI inflation rate – cumulative four quarter span basis 17 2.4 $A/$US and weighted average exchange rate 18 2.5 Australian net immigration and population increase 18 2.6 Real and nominal 90 day bill rate 19 2.7 Employment growth and unemployment 19

3.1 Queensland dwelling – new construction approvals ($ million) 36 3.2 Queensland dwelling – new construction approvals (number) 37 3.3 Queensland non-residential building approvals 37 3.4 Real Queensland established house prices 38 3.5 Queensland housing rental vacancy rate 38 3.6 Queensland housing approvals 39 3.7 Queensland – Private non-residential building work done and private non-residential building approvals 41 3.8 Excess demand for dwellings – Queensland 41 3.9 Queensland share of national population increase and national approvals 42 3.10 Queensland non-residential building approvals and work done 43 3.11 Queensland non-residential projects under construction, committed and under consideration 44 3.12 Queensland mining, LNG and metal ore investment 47 3.13 Queensland real mining output % rate of growth 47 3.14 Queensland mining investment 48 3.15 LNG expansion 48 3.16 Queensland engineering – work done 49 3.17 Queensland total engineering – work yet to be done 50 3.18 Queensland engineering projects under construction, committed and under consideration 50 3.19 Share of public engineering in total engineering 52 3.20 Share of Queensland construction industry in GSP 52 3.21 Queensland non-residential construction and private non-residential building expenditure share in GSP and GSP growth 53 3.22 Change in expenditure on identified engineering projects – Brisbane 66 3.23 Change in expenditure on identified engineering projects – Gold Coast 66 3.24 Change in expenditure on identified engineering projects – Sunshine Coast 67 3.25 Change in expenditure on identified engineering projects – West Moreton 67

List of figures (cont.)

Page no.

3.26 Change in expenditure on identified engineering projects – Wide Bay-Burnett 68 3.27 Change in expenditure on identified engineering projects – Darling Downs 68 3.28 Change in expenditure on identified engineering projects – South West 69 3.29 Change in expenditure on identified engineering projects – Fitzroy 69 3.30 Change in expenditure on identified engineering projects – Central West 70 3.31 Change in expenditure on identified engineering projects – Mackay 70 3.32 Change in expenditure on identified engineering projects – Northern 71 3.33 Change in expenditure on identified engineering projects – Far North 71 3.34 Change in expenditure on identified engineering projects – North West 72

4.1 Unused capacity in Queensland’s construction sector 84 4.2 Real construction costs versus labour shortage 84 4.3 Queensland labour shortage and real quarterly price growth 85 4.4 Annual growth in Queensland construction employment 85

i

Executive summary

A review of the core findings

In last year’s Annual Report despite the fact that at least three LNG projects were to be simultaneously constructed over the 2011 to 2016 period the assessment was that the Queensland construction sector will in all probability be able to operate without severe labour shortages. This was a similar conclusion to the 2010 report. The core conclusion of this report is the same. That is Queensland construction sector will be able to operate over the medium term without returning to the labour and capacity shortages of the 2005 to 2008 period. Indeed this conclusion has been strengthened in this report with the medium and longer term outlook for the Queensland construction sector downgraded.

Partly the conclusion flows from the assumption of an increase in net immigration to ease labour supply pressures. Partly it results from a more pessimistic assessment of non-resource and resource construction flowing from a downgrading of the strength of construction industry activity drivers, due to such factors as the crowding out impacts of mining, current mining expansion and the continued structural weakness in the Queensland economy to new trends which could reduce the longer term expansion of the Queensland resource and construction sector. These trends range from political instability in the Western Pacific to the emergence of shale gas and coal seam methane gas as major resources to be exploited in a number of countries.

1. In the past economies subject to the same scale of negative shock that the GFC imposed on a world scale have taken up to a decade to fully recover. In the past this Report did not consider that it would be any different for the post GFC world economy. The world-wide economic turbulence that has arisen over the last year has made it impossible to ignore this reality and expected medium term growth outcomes have been downgraded. The outlook for the world economy over the next few years will be subdued. Strong sustained World growth is unlikely to return until the middle of this decade at the earliest.

The World economic outlook has not changed significantly from last year’s report with the summary similar.

The trillions of dollars of wealth wiped out by the GFC and the damage done to balance sheets (value of assets less than debt, etc.) was not a cost that would allow a traditional post World War II recession recovery with a rapid return to strong world growth. World growth in 2010 did return to the 4% level due to strong fiscal and monetary stimulus measures. The stimulus has now ended and world growth over the past year has declined significantly.

In the developed world, many countries’ economic growth prospects are constrained by one or all of high household debts, high public sector debt and/or rapid growth in public debt as a per cent of GDP, and a substantial proportion of households that have negative equity in their dwellings.

Moreover the severity of the GFC increased the perceptions of risk which, by itself, would have retarded growth. Full confidence will take years to return. However, perceived risk has been further increased by political constraints which, at this stage, seem intractable. The Euro debt crisis can be easily solved by allowing the European Central Bank to be lender of last resort to the Euro countries and moving towards full

ii

fiscal integration. However, individual countries do not want to give up the sovereignty this entails or to defacto allow Germany more control.

The United States’ fiscal problem could be solved by effectively restoring tax rates that prevailed on high income households in the early 1990s. However, the United States appears to be moving down the path towards a class conflict to prevent this from happening. In this concert if the mandated expenditure reductions are allowed to proceed, in 2013 the US growth rate would be significantly negative as it involves a reduction in demand of between 3% and 4% of GDP.

Over 2011 inflation came to the fore as a major constraint to, at least, short-term growth for emerging economies which forced into reduction of anti-inflationary measures. This is now contributing to relatively poor growth outlooks in China and India.

The projected growth outlook for the world economy in 2012 is a rate of growth of 2.6% which qualifies as a world recession.

This Report, however, does assume that the current difficulties are to some degree reduced, if not eliminated, by the middle of the next decade so sustained, if not high, world growth can be achieved. Whether or not this is too optimistic is no longer an economic issue but a political issue.

2. Provided China continues to grow at, at least, moderate growth rates (that is, in excess of 7%), then Australia will not meltdown with a financial/balance of payments crisis as would otherwise have been possible given the world difficulties. However currently China is growing at a growth rate of between zero and 6% which if continued would create extreme difficulties for Australia. Towards the end of the projection period there are other political difficulties with China which may well emerge with adverse consequences for Queensland resource development.

There is strong recent evidence which suggests that the Chinese economy is growing at a low rate and most certainly lower than what the official statistics may suggest. This represents the direct consequences of the anti-inflationary policies introduced in 2011 as well is the slowdown in the world economy limiting Chinese export growth. The assumption adopted here is the Chinese economy will recover over the next two years tracking up to growth rates of around 8%. Nevertheless the unexpected loss in growth for this and the next year will result in a permanent loss in commodity requirements (coal, iron ore etc.) compared to what would have been expected a year ago. This will have consequences for the rate of mining investment in Queensland from 2015 onwards and this is reflected in the current profile.

Longer term, there are political difficulties with China which may well limit significantly the prospects for Queensland resource development post 2018. China's current behaviour and territorial claims in the South China Sea in the context of the sustained military build-up especially in naval infrastructure and reinforced by China’s demand that Australia choose between the American alliance and trade with China must be of concern and has largely gone unnoticed in the Australian context. The American response is reflected in the current proposals to set up a Pacific trading bloc that will exclude China which in the worst case would be transformed into a NATO type economic and military bloc that characterised the Cold War of the 1950s and 1960s. Such a development would greatly limit the potential for Queensland resource development. At the very least the expectation is that China will attempt to diversify away from reliance on Australian trade to either sourcing commodities from other

iii

countries or rapidly developing its own coal and gas resources. This more moderate scenario is reflected in the current projections post 2016.

3. After reaching 300,000 over the 2008 and 2009 period, Australia’s population growth is in excess of 250,000. Australia’s net immigration rate for 2010-11 is estimated to have fallen to 170,000 and the population growth to 1.4%. However, the national net annual immigration rate is projected to increase to over 200,000 over the next four years in response to the upswing in mining investment. Queensland’s population growth in the short term should return to around 2% per annum and be sustained at that rate for some time.

The national net immigration rate is projected to oscillate between 200,000 and 210,000 over the next four years to ensure adequate labour supply to the mining regions in Western Australia and Queensland. The national population growth will climb back to 1.6% per annum. However, with unemployment climbing towards 6% post 2015, the net national immigration rate should return to around 180,000 and population growth to 1.5%.

Over the 2013 to 2015 period Queensland's net immigration rate is projected at near 50,000. After that date the reduction in resource demands for resource investments will result in the net immigration rate being gradually reduced to 42,000 by the end of the projection period.

4. After growing between 4% and 6% over the years prior to the GFC, Queensland’s gross state product has averaged 0.8% per annum for the three fiscal years 2009 to 2011. The expected growth rate of 2012 is near 5%. The scale of resource development now undergoing in Queensland and the resulting production flow on will make it difficult for Queensland not to average GSP growth rates of nearly 4% for the next four years. Over the final five years of the projection period due to the difficulties noted elsewhere in this executive summary in Queensland GSP growth rate averages 3.4%.

Although reasonable headline GSP growth rates will be expected by many in Queensland this will be a more optimistic outcome than the reality. The reality will be that the more important indicator gross net disposable income for Queensland will grow at a significantly slower rate. This is because the surplus generated by LNG projects in particular will in the main flow outside the state.

There are other difficulties. Queensland has caught up with New South Wales in terms of household net debt to income ratios which will be a major constraint on growth and will prevent the return of the high pre-2008 growth rates. It will also mean that despite strong headline GSP growth rates consumer expectations will be somewhat subdued.

5. The immediate outlook for dwelling construction expenditure is subdued and significant falls are expected in non-residential building construction. The short-term outlook is one where resource-based engineering expenditures are the driver for construction growth. The core assumption of the outlook post 2015 is that the pickup in growth in the Queensland economy will result in reductions in unused capacity in commercial infrastructure triggering a recovery in private non-residential expenditures. In addition sustained short to medium term job growth will give households confidence to borrow for dwelling construction. Even allowing for this relatively optimistic scenario the projections envisage that over the next decade the housing shortage in Queensland will double to around 90,000.

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The indicators describing the immediate past and immediate future outlook for Queensland construction and it segments are described in the attached tables of this executive summary. In terms of the headline total construction activity growth rate the results are as follows. After growing by 5.3% in 2011 the estimated increase in 2012 is 16.4% which will be followed by a 5.8% increase in 2013 fiscal year. For the next three school years that is from 2014 to 2017 the wind back mining infrastructure expenditures will result in an average annual growth decline of 1.8% per annum. Over the last five years of the projection period the growth rate is a modest 0.9% per annum.

6. The regional dimension of Queensland construction activity flows directly from the behaviour of the construction expenditure segments at the Queensland level. Over the 2012 and 2013 years Queensland total construction activity is projected to grow at an average rate of 11%. Almost all of this growth rate will be generated by the Fitzroy and Mackay regions with Fitzroy contributing 7.2 percentage points and MacKay 3.2 percentage points. However the wind back of the rate of resource development will result in a gradual increase in the contribution of non-resource regions to Queensland's total construction growth post 2015. Towards the end of the projection period south-east Queensland regions resume their pre-2005 role as a generator of total Queensland construction expenditure.

Pre-2006 the contributions of the regions to Queensland's total construction growth rate was in proportion to their population size. That is between 2000 and 2005 the Brisbane, Sunshine Coast, and Gold Coast regions contributed over 70% of the Queensland total construction growth rate. With the advent of rapid mining expansion this contribution declined to the extent that now the resource-based regions are generating almost all of Queensland construction sector growth which will continue for the next year or two. This will change with the recovery in private dwelling expenditures and the role of population growth in driving both residential and non-residential construction expenditures.

However there are difficulties with this scenario. As is put out in the study, the Sunshine Coast and Gold Coast regions in particular have severe housing affordability issues in that the local economic infrastructure cannot generate the income necessary to support mortgages for new dwelling construction. Modest development in these regions is going to depend on the regions attractiveness to new migrants who are willing to continue the historical process to import equity capital to fund their development.

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Figure E.1: Australian GDP and Queensland GSP

80

85

90

95

100

105

110

115

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

Annual % change

Australia Queensland

Table E.1 Australia and Queensland gross product and construction activity indicators

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

Average 2015-2022

Gross product

Australia (2010-11 =100) 94.6 95.9 98.1 100.0 103.2 105.8 108.7 126.6

Queensland (2010-11 =100) 97.3 98.1 99.8 100.0 104.8 108.7 112.4 133.6

Dwelling expenditure

Australia (2010-11 =100 97.7 95.8 99.3 100.0 96.0 95.6 100.7 118.4

Queensland (2010-11 =100) 128.7 117.9 113.7 100.0 96.3 96.3 111.0 126.3

Non-residential building expenditure

Australia (2010-11 =100) 92.4 94.5 102.2 100.0 87.3 79.3 79.2 88.6

Queensland (2010-11 =100) 86.1 93.7 95.9 100.0 87.3 77.3 71.8 85.8

Engineering construction

Australia (2010-11 =100) 74.5 88.3 90.0 100.0 126.2 144.1 143.1 138.1

Queensland (2010-11 =100) 73.6 87.5 83.1 100.0 138.5 154.8 144.3 137.1

Total construction expenditure

Australia (2010-11 =100) 86.3 92.2 95.7 100.0 107.9 114.4 115.8 121.0

Queensland (2010-11 =100) 93.2 98.2 94.9 100.0 116.4 123.2 121.5 124.3

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Table E.2 Annual growth and % contribution to construction activity by major construction segment

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

2014-15

Annual percentage rate of change (%) Dwellings 5.3 -0.6 -8.4 -3.6 -12.0 -3.7 0.1 15.2 9.2 Total non-residential building 16.8 3.1 8.9 2.3 4.3 -12.7 -11.4 -7.1 -9.0 Total engineering construction 20.1 22.2 19.0 -5.1 20.3 38.5 11.8 -6.7 -10.3 Total construction 12.1 8.2 5.4 -3.3 5.3 16.4 5.8 -1.3 -4.5 Contribution to total construction growth (%) Dwellings 2.5 -0.3 -3.2 -1.4 -3.8 -1.0 0.0 4.4 3.0 Total non-residential building 2.7 0.5 1.4 0.4 0.7 -1.6 -1.2 -0.7 -0.9 Total engineering construction 7.2 9.0 8.7 -2.3 10.5 23.5 7.6 -4.1 -5.9

Table E.3 Construction activity by Queensland region – 2010-11 = 100 2007-

08 2008-

09 2009-

10 2010-

11 2011-

12 2012-

13 2013-

14 2014-

15 Average 2015-22

Brisbane 101 108 97 100 102 86 81 85 116.6 Gold Coast 117 114 118 100 98 96 96 97 119.4 Sunshine Coast 101 97 92 100 96 76 94 105 118.7 West Moreton 90 124 103 100 97 90 87 100 139.9 Wide Bay/Burnett 107 101 98 100 124 120 116 100 99.8 Darling Downs 80 77 85 100 156 230 256 194 147.2 South West 214 218 128 100 408 684 770 712 331.3 Fitzroy 47 61 75 100 185 225 217 225 149.6 Central West 58 69 65 100 119 159 176 171 92.9 Mackay 59 67 79 100 108 172 165 104 82.9 Northern 113 117 108 100 91 75 71 76 91.8 Far North 122 124 98 100 98 86 86 94 114.3 North West 64 88 85 100 167 248 208 183 113.6 Queensland 93 98 95 100 116 123 122 116 118.3

Table E.4 Share of total construction activity by Queensland region (%) 2007-

08 2008-

09 2009-

10 2010-

11 2011-

12 2012-

13 2013-

14 2014-

15 Average 2015-22

Brisbane 43.0 43.5 40.6 39.7 34.8 27.7 26.5 43.0 37.8 Gold Coast 14.6 13.5 14.4 11.6 9.8 9.1 9.2 14.6 11.5 Sunshine Coast 7.6 7.0 6.8 7.0 5.8 4.3 5.4 7.6 7.0 West Moreton 1.3 1.8 1.5 1.4 1.2 1.0 1.0 1.3 1.6 Wide Bay/Burnett 4.9 4.4 4.4 4.3 4.6 4.1 4.1 4.9 3.6 Darling Downs 3.0 2.8 3.1 3.5 4.7 6.5 7.4 3.0 4.5 South West 1.4 1.3 0.8 0.6 2.1 3.4 3.8 1.4 2.0 Fitzroy 6.1 7.5 9.5 12.1 19.3 22.1 21.6 6.1 16.4 Central West 0.2 0.2 0.2 0.3 0.3 0.4 0.5 0.2 0.3 Mackay 6.4 6.8 8.4 10.1 9.3 14.1 13.7 6.4 7.3 Northern 5.8 5.6 5.4 4.8 3.7 2.9 2.8 5.8 3.6 Far North 5.1 4.9 4.0 3.9 3.2 2.7 2.7 5.1 3.7 North West 0.6 0.7 0.7 0.8 1.2 1.6 1.4 0.6 0.8 Queensland 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

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Table E.5 Total construction – average annual growth rates by Queensland regions

1993-2011 2011-2015 2015-2022

Brisbane 4.3 -4.1 5.7Gold Coast 5.9 -0.8 3.6Sunshine Coast 4.6 1.3 2.3West Moreton 3.1 -0.1 6.5Wide Bay/Burnett 3.3 0.0 -0.2Darling Downs 3.5 18.0 -3.3South West 6.8 63.4 -14.5Fitzroy 7.9 22.4 -6.6Central West 3.7 14.4 -9.8Mackay 11.2 1.1 -5.8Northern 4.8 -6.7 3.2Far North 2.6 -1.4 2.9North West 4.8 16.4 -10.7Queensland 5.1 3.8 0.4

Table E.6 Drivers of construction growth by Queensland region 2011-2022 (average annual $m change between span years) 2011-2015 2015-2022

Dwellings

Non-residential

con-struction

Engineer-ing

Total con-struction Dwellings

Non-residential

con-struction

Engineer-ing

Total con-struction

Brisbane 118.1 -188.2 -385.5 -455.6 261.2 142.8 640.0 1044.0 Gold Coast -34.0 -211.0 21.2 -223.8 73.3 42.8 90.4 206.6 Sunshine Coast 8.3 83.6 -8.2 83.7 63.8 -25.3 43.3 81.7 West Moreton 5.7 -14.7 4.6 -4.4 24.4 11.5 14.0 50.0 Wide Bay/Burnett -16.7 -48.3 73.0 8.0 9.9 26.4 -41.0 -4.6 Darling Downs 17.3 -19.4 349.6 347.5 15.2 23.2 -131.9 -93.5 South West 5.1 -0.1 319.3 324.2 4.8 -0.3 -192.3 -187.8 Fitzroy 69.9 22.3 1576.9 1669.1 39.3 3.2 -723.6 -681.1 Central West 4.1 -0.8 29.5 32.8 2.6 0.3 -22.4 -19.5 Mackay 11.3 -25.3 244.0 230.0 -1.1 10.7 -244.7 -235.1 Northern 5.2 -49.4 -97.3 -141.5 22.4 11.0 24.1 57.5 Far North 21.1 -19.6 -12.5 -11.0 13.1 17.4 21.9 52.4 North West 3.8 -0.1 68.7 72.4 2.1 -0.5 -54.4 -52.8 Queensland 219.4 -471.2 2183.2 1931.4 531.0 263.1 -576.4 217.8

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Table E.7 Shortage of construction labour by Queensland region – number (shortage is denoted by +/surplus -)

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

2014-15

Average 2015-22

Brisbane 4168 5684 10233 -1023 -1125 -5893 -23210 -29358 -6742 Gold Coast 4499 5514 2229 3732 -2438 -1320 -3077 -4162 392 Sunshine Coast 3465 4019 1592 -732 802 -434 -4896 -1799 1069 West Moreton 1634 1167 1684 -254 -365 -569 -810 -933 -139 Wide Bay/Burnett 1053 2226 1421 78 -1939 -1337 -1935 -2442 -4373 Darling Downs 1434 885 351 86 -949 1990 7782 9645 665 South West -550 1290 784 -132 -682 1116 2835 3342 844 Fitzroy 987 385 1230 325 306 6646 10455 9177 2139 Central West -132 -84 1 -66 89 84 280 355 -11 Mackay 2487 1332 917 443 476 -713 4943 3913 -4238 Northern 812 542 1395 907 112 -1769 -4327 -5194 -3459 Far North 1297 2816 2268 -743 -250 -555 -2469 -2704 193 North West -300 -361 59 -67 -79 555 1581 1045 -77 Queensland 20854 25415 24165 2555 -6042 -2199 -12849 -19116 -13735

Table E.8 Queensland construction industry – real quarterly price growth at annual rates (%)

2011-12

Sep.

2011-12

Dec. 2011-

12 Mar. 2011-12

Jun. 2012-13

Sep. 2012-13

Dec. 2012-13

Mar. 2012-13

Jun. 2013-14

Sep.

Average2011-12

and2013-14

Actual Forecast

Non-residential building 2.4 1.0 -0.1 -0.1 -0.3 -0.4 -0.4 -0.4 -0.3 0.2 Residential building -1.5 -4.3 -0.1 -1.1 -0.7 -0.9 -1.0 -0.9 -0.6 -1.2 Engineering construction -4.4 2.0 0.4 2.4 0.7 0.6 0.5 0.4 -0.1 0.3 Total construction -1.6 -1.4 0.0 -0.1 -0.3 -0.5 -0.6 -0.5 -0.4 -0.6

July 2012 Survey results: Summary

• This survey was conducted to the background of the merger of Qbuild and Project Services and significant staff reductions in the Queensland Public Service including the regional Qbuild offices. Understandably, there was a general atmosphere of uncertainty among respondents about the future.

• Federal Government stimulus package related construction activity and natural disaster repairs were complete and respondents reported a general decline in public sector construction works across the state. A general slowing of construction activity was reported outside of those regions directly influenced by resource based activities.

• One of the issues where concerns were raised was training of trade and other construction related skills. The loss of Qbuild apprenticeships in the future was seen as a problem for the construction industry in Queensland as Qbuild has traditionally led

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the skills development and training effort of construction trades in Queensland. It was seen as increasingly important to continue the trade training effort through apprenticeships in the private sector, in schools, TAFEs and trade training centres and the like.

• Domestic housing construction was generally slower except in those centres which had become a residential hub for fly-in-fly-out, drive-in-drive-out mine workers.

• As last year the mines continue to have an influence over employment of tradespeople.

• Again few skills shortages were reported in this year’s survey, specialised trades such as mechanical, electrical, refrigeration and plumbing tend to be scarce in regional and remote regions.

• Tender responses in terms of number of responses had improved in most regions.

• There are pricing variations between regions with many regions reporting no or only minor increases in costs.

• Typically, although there were exceptions, quality issues experienced during the construction boom of a few years ago were no longer evident.

• Private sector property development activity is broadly slow, and the shortage of work at the design stage, suggests a further slowing in construction activity. A number of major public construction projects such as major hospitals were nearing the end of their construction life cycle.

• In terms of industry capacity, regions were reporting variation which ranged from 50% to 100% operating capacity. The figures were generally lower than in previous years.

• The social impact of the concentration of construction work to resource based regions and the decline of construction activities elsewhere was raised as an issue. This is because trades people, if they wish to continue employment, are increasingly likely to work away from their families and do so sometimes for lengthy periods of time. There are also the social impacts on communities which are host to high numbers of fly-in-fly-out workers.

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1. Introduction

This study has the following objectives:

(i) to undertake an historical analysis of Queensland regional construction activity over the 1990 decade to 2011;

(ii) to project Queensland regional construction activity to 2022; and

(iii) to analyse both historically and to project the capacity of Queensland regions to meet construction demands.

The Queensland regional analysis is undertaken at the Australian Bureau of Statistics’ Statistical Division level. This has resulted in the Morton region of the previous reports being disaggregated into three regions namely the Gold Coast, the Sunshine Coast and West Moreton.

Section 2 overviews the Australian and Queensland economies for the next few years. Section 3 analyses the construction sector from the national, Queensland and Queensland regions’ perspective.

Section 4 analyses capacity utilisation and cost pressures in the Queensland construction sector as well as by region.

A survey was conducted of representatives from the Queensland Department of Housing and Public Works in July 2012 and the results are presented in Appendix G.

Finally, Appendix H lists the major projects explicitly used in developing the regional engineering construction profiles.

There are two very important points to remember when reading the text. There are no nominal values used in the study. All dollar million or dollar billion values referred to are in constant prices or technically CVM prices which in this report is the prices of the 2009-10 fiscal year. Also in terms of the domestic economy the calendar years are not in general referred to unless otherwise explicitly noted. That is all years are fiscal years so 2010 would refer to the 2009-10 fiscal year. The exception is for the world economy section where all years referred to are calendar years.

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2. The economic outlook for the world, Australia and Queensland to 2020

This chapter is divided into three segments. Each segment considers the macroeconomic environment for the world, Australia and Queensland.

Introduction

The evidence is accumulating that the Australian economy in terms of this current episode of rapid mining expansion will be subject to a significantly more severe case of the Dutch disease than what has been the case in the past. For the current and next financial year the major states of New South Wales and Victoria are unlikely to grow by much more than an average of 1.7% per annum while Western Australia and Queensland will grow between four and 6%. Australian economic growth is projected at this stage to be around 2.6%. In the past given the current headline economic settings Australian economic growth would be expected to be above 4% per annum given the terms of current intentions, mining investment expenditure of 2013 fiscal year is planned to be a multiple of 2.5 of a level that prevailed in 2010-11. It should be noted that that a significantly less bullish estimate of the mining investment in 2012-13 is projected in this report. Nevertheless overall Australian growth should be much stronger.

The question is why? Clearly the intensity of the Dutch disease is accelerating. This is not unexpected. The current mining boom has gone now for half a dozen years and the expectation in the early years by non-resource businesses would have been an end to the boom by now with a return to more competitive exchange rates. This expectation has now been well and truly dashed and businesses are facing up to the fact of the necessity of painful restructuring.

It also appears that confidence is becoming an important driver of economic activity rather than simply reflecting the information available in the economic indicators. The reasons for this advanced in this report is the now high degree of vulnerability of Australian households to negative economic shocks because of high debt levels and low discretionary savings. The picture that emerges is one of an increasing number of households living from pay cheque to pay cheque with little scope to absorb the shock of an unexpected reduction in pay cheques. Secondly the average household is probably well aware of structural changes in the economy from the longer run impact of the Dutch disease, the impact of communication technologies on such key employment sectors of retail and wholesale trade, the reliance on domestic finance sector on domestic savings which will significantly reduce real incomes that can be harvested from that sector, and the inability of the economy in key states to generate the secure high-paying jobs necessary for families to be able to afford the mortgage burden on new construction. All this is influencing decisions to spend and is not helped by negative news from overseas such as the continuing euro crisis and next year the distinct possibility of political/economic crisis in the United States.

The projection assumes that the current difficulties occurring are overcome and the world does resume stable economic growth from 2015 onwards. This ushers in a period where Australian economic growth returns to above 3%. The main drivers of growth both in Australia and in other high income countries is simply the impact of suppressed demand since 2008 and the repair of public and private sector balance sheets.

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Towards the end of the projection period for Australia at least, major difficulties could lay ahead. These difficulties will surround the political issues arising from the change in the power balance in the Western Pacific from the rise of China. Towards the end of this year China will pass the United States in terms of economic size when GDP is measured in PPP exchange rates and may well have a larger resource base than the United States in the region by 2020. The implications of this for Australia will be profound and will be extremely difficult to even analyse let alone develop effective strategies to navigate successfully the changes. Certainly these factors are likely to be a significant negative for Australian household and business confidence from 2016-2018 onwards.

2.1 The world economic outlook

The instability and uncertainty around the world economy continues. The only certainty in looking ahead is that the uncertainty and instability will continue.

2.1.1 The Euro Zone

The Euro Zone countries are now facing up to the fact that for the foreseeable future there will be no growth through austerity. It is now accepted that in conditions facing high income countries around the world the basic Keynesian multiplier for government spending is between 1.5 and 2.5, which means that at best there is only modest gains in the government debt to GDP ratio from cuts in government expenditure or contracting GDP growth and at worst increases in the government debt to GDP ratio and contracting economies. In the worst case scenarios of high multipliers the additional factor is the negative impact on confidence from already fragile economies.

This realisation has occurred at the same time as election outcomes in Greece and France and political developments, such as in the Netherlands, which indicates that the politics of sustained severe authority are unlikely to be feasible.

The political pressure can only increase. Unemployment is increasing and in particular youth unemployment. The proposition of young people now without employment between the ages of 15 and 28 is 51% in Greece and Spain, 36% in Portugal and Italy and 30% in Ireland. In France it is 20% with the United Kingdom rapidly approaching this level.

It is one thing to conclude that austerity policies will not promote medium-term growth and are politically infeasible. It is another thing to design and implement alternative practical and sustainable policies.

2.1.2 Towards sustainable policies

The long-term outcome for the Euro Zone countries will be the adoption of a full fiscal union (along the Australian lines), a common government bond (a Euroland) and a full binding union. However, the movements towards these institutional structures will be slow and event driven.

In the short-term the existing and proposed institutions will have to keep the economies together and stable.

4

At the moment the European Central Bank (ECB) is maintaining stability by open ended purchases of national government debt from banks in exchange for bank deposits at the ECB. This is providing the liquidity the banks need to maintain financing tasks and removing the inactivity of capital loss on government debt. This has meant that Central Bank assets/liabilities, as a per cent of Euro GDP, are increasing rapidly towards the 30% of GDP mark. In nominal terms this would signal large inflationary pressures. However, in the current environment all that is happening is the replacement of one liquid asset (of dubious quality) with another. As the ECB cannot bring government debt directly from governments, the hope is that the banks will also roll-over government debt and buy new government debt with the enhanced liquidity.

In the short-term Greece and Spain (given the problems with its banking system) are likely to default into the European Stability Mechanism (ECM) coming into force in July 2012. To cater for this, on the current funding the ECM would need additional resources while the members would have to transfer funds to the ECM. Some members (Italy, etc.) would not be able to do this.

At this point the Euro Zone members, to avoid any more direct transfers to the ECM, would argue for the ECM to issue its own liabilities jointly guaranteed by the Euro Zone countries as a whole. That is, a Euroland, although it may not initially be called that. The end game will be to give the ECM a banking licence so that it can fully function as a central bank, overcoming the obligations hindering the operation of the ECB in terms of the lender of last resort functions.

This scenario is what has been assumed in the projections. This may not stop a Greek exit from the Euro if the political developments in Greece prevent the Greeks accepting a modified burden of austerity and loss of sovereignty. In this situation, given Greece’s high current account deficit, a Greek exit from the Euro would result in a collapse of the new currency, the printing of money, hyper-inflation and 10% to 15% further contraction in GDP. However, if this happens Greece may indeed be the catalyst to drive rapid responses needed to save the rest of the Euro Zone. To prevent contagion however it and runs on other European banks the ECB will have too quickly need to be a lender of last resort to all institutions irrespective of whether this can be done legally or illegally. Nevertheless no matter what the longer-term benefits of a Greek exit maybe the short-term impact by necessity will be a negative for world growth.

One reform will be a rapid increase in the European Union budget to drive the change in transfers between countries to reduce growth discrepancies and reduce the force of austerity measures.

There will be substantial instability ahead. However, except for perhaps a Greek exit, the Euro Zone is likely to be maintained, if only for the reason that the key economy in the Euro Zone, namely Germany, is currently performing well and this in part is due to the benefits the common currency gives to Germany.

2.1.3 The United States

Although it is perhaps not generally recognised, the medium-term constraints on the growth of the United States economy are more intractable than what is the case for the Euro Zone.

The core problem for the United States is that the current income distribution in the US is a solid barrier to any quick return to sustained growth in the US economy. It is simply a matter of arithmetic.

5

The facts are straight forward. At the end of the 1970s the top 1% of households in the US received around 12% of income. By 1994 this had risen to 14.4%, 21% by 2006 and is around 23% on current estimates. This change was generated at the margin by the top 1% of households receiving 40% to 50% of the total household income gains between the early 1980s and 2000, and 75% of the income gains from 2000 to 2008. Some initial estimates place the percentage of total increase in household income over 2010 received by the top 1% of households at 100%, offsetting the income losses of over 2009.

With low short-term marginal propensity to spend out of income for the top 1% of households, say less than 20%, any increase in economic activity from increased exports or increased investment income generates a weak flow-on response from the rest of the economy.

The US is a classic example of the need for the strategy of the balance budget multiplier approach to fiscal policy, as an alternative to austerity. After World War II, governments were constrained by very high debt to GDP ratios, considerably higher than the case today. However, there were considerable demands on governments to drive growth, in part by eliminating the backlog of infrastructure as a result of the depression and war. The necessary expenditures were expansionary on the economy in the context of a balanced budget since they were financed by high marginal tax rates on high income households and, therefore, with high marginal savings rates. That is, the taxes had little impact on demand formation.

It appears that there is little chance that such a strategy will be applied in the US for the foreseeable future. As a result, the US economic growth rate is likely to continue to disappoint.

There is, however, considerable risk that the US may have significant negative fiscal shocks. Because no bi-partisan agreement was reached in regard to a deficit reduction program, expenditure reduction in social security, defence and income/payroll tax increases are legislated to occur over 2013, which would directly subtract between 3% and 4% from US demand. This would trigger a return to recession. The assumption adopted in this projection is that the reduction will spread over 2013 to 2015. However, in the context of the bitter partisan divide that now characterises US politics, and the uncertainty around the 2012 national election outcome, it would be wise to plan for extreme economic instability in the US over 2013. This would take the form of a weak currency and ipso facto a high Australian exchange rate vis-a-vis the US. The expected range in this case is likely to be between A$1.08 to A$1.16 compared to US$1.

The medium-term outlook is one where the US enters a period of relatively low economic growth compared to past trends. The political economy of the US becomes one of “muddle through”. There is almost an equal probability of the alternative scenario that the continuation of the strong partisan divide in US politics will result in increasing political disfunctionality which will constrain US growth too low levels on a trend basis for many years to come.

2.1.4 China

The Chinese economy is reported to be growing in the vicinity of just under 8% into 2012. It is not. Over 2010 China’s electricity production grew at near the rate of reported GDP. That is, 10%. However, for April 2012, China’s electricity production was only 1% higher than a year earlier. The March figure was a 7% increase over a year earlier. No doubt the April

6

reading was due to one-off factors. However, it is consistent with the view that the Chinese economy will grow at least by 3% to 4% in 2012, irrespective of what the official statistics say.

The good news is that the inflationary pressures unleashed by the stimulus measures to combat the GFC are now abating. China’s inflation is now running at 3.6%, tracking down to under 3% by the end of 2012. The actual outcome may be close to 0 the government statistics will never reflect this fact. This will enable the authorities to expand demand by increasing the credit supply to State-owned/controlled enterprises initially and then the wider economy. This time round there will no doubt be firmer controls on the allocation of credit to housing markets.

By 2014 the Chinese economy is likely to be back to 8% plus growth rates, driving world economic growth back up towards the 4% per annum mark.

Looking towards the end of this decade, there are troubling issues around China which could radically alter the outlook. China's current territorial claims in the South China Sea and its current behaviour in enforcing those claims is a source of worry especially when set against the backdrop of a rapid build-up in Chinese military capability.

The pressure on the United States to match China’s military build-up will be intense. However, the US will need a strong incentive to do this and risk overt conflict with China. What may well be the incentives the US will demand was spelled out by President Obama at the APEC meeting of November 2011. This was for a trading block excluding China that in effect could be used to manage trade flows to the benefit of the US and to the detriment of China. If China maintains its current behaviour, the proposed trading block would resemble the NATO trading/military block of Europe 1948 to 1990 which, in effect, imposed a highly effective trading embargo on the Soviet Union and its satellites. Such a development would have severe implications for Australia and would bring the mining expansion to an abrupt end with rapid falls in commodity prices and the exchange rate.

At this stage all that can be done is to note that it is a distinct possibility. However, in the current projection some account has been taken of likely increasing political difficulties with China. China is telling Australia now that Australia cannot have it both ways. It cannot continue to enjoy the benefits of being hitched to the Chinese growth locomotive while at the same time enjoying the benefits of the US defence umbrella. Australia must choose. Assuming Australia chooses the United States, Australia’s exports to China can be expected to slow and even decline after 2017 or 2018. The start of this pressure has been allowed for in this projection, which is why high current account deficits return towards the end of the projection period. In this context the years 2021 to 2025 could be very poor years for Australian growth, given that the US/Australian political tensions with China do not appear to have an easy resolution given China’s hardening attitudes as its economic and political power increases.

If the current opinions of the state-controlled Chinese press are any guide it would appear that the Chinese are assuming that the United States political difficulties will lead to a rapid deterioration in US economic and military power over the next decade. Certainly, the Chinese have hardened their view that a Liberal Democratic political system is not the optimal one for China.

2.1.5 Oil prices and inflation

The recent development of significant discoveries of shale gas and the development of technologies to extract it plus the relentless drive to increase oil consumption efficiency both for the climate related issues as well as energy security are giving rise to more optimism that the oil price may not be as great a constraint on growth as was previously predicted.

7

However all this might be true of the long-term trend but political and military instability in the Middle East especially over the next 5 to 10 years would impose an oil price shock on the economy which would be destructive in terms of its impact on economic activity. Shale gas has shifted the balance of risks in regard to the oil price from economic to political.

Figure 2.1: World GDP

2.0

2.5

3.0

3.5

4.0

4.5

5.0

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Per cent

Figure 2.2: World inflation

3.0

3.5

4.0

4.5

5.0

5.5

6.0

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Per cent

8

9

Table 2.1 Annual real GDP growth rates by country (calendar years) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Argentina 7.5 6.8 0.9 8.3 6.0 3.4 3.8 2.3 2.6 2.7 2.6 2.5 1.9 2.4 2.1

Australia 4.4 2.2 1.2 2.9 2.8 2.6 3.1 2.6 3.1 3.1 3.1 2.9 2.2 2.7 2.5

Belgium 2.6 0.8 -2.7 2.0 1.8 0.2 0.9 1.2 1.5 1.5 1.5 1.4 1.1 1.3 1.2

Brazil 4.4 5.1 -0.2 7.7 4.3 3.0 4.2 3.1 3.6 3.7 3.6 3.5 2.6 3.3 2.9

Canada 2.5 0.5 -2.5 2.9 2.6 2.0 2.2 2.0 2.4 2.5 2.4 2.3 1.7 2.1 1.9

Chile 5.9 3.7 -1.5 5.1 6.0 3.9 4.6 3.4 4.0 4.1 4.0 3.9 2.9 3.6 3.3

China 11.5 9.6 9.1 10.2 7.0 4.0 6.0 8.0 8.4 8.6 8.4 8.0 6.1 7.5 6.8

Czech Republic 5.6 2.5 -4.1 2.0 1.9 0.2 1.8 2.7 3.1 3.2 3.1 3.0 2.3 2.8 2.5

Denmark 1.9 -0.9 -4.7 2.0 2.0 0.8 1.2 1.6 1.9 2.0 1.9 1.8 1.4 1.7 1.6

Egypt 7.1 7.2 4.7 2.1 1.0 1.4 4.9 3.9 4.5 4.6 4.5 4.3 3.0 3.6 3.3

Finland 4.3 0.9 -8.0 3.1 2.5 -0.1 1.0 1.4 1.7 1.7 1.7 1.6 1.2 1.5 1.4

France 1.9 0.1 -2.5 1.5 1.0 0.1 0.8 1.4 1.6 1.6 1.6 1.5 1.1 1.4 1.3

Germany 2.4 1.0 -4.7 3.5 2.9 0.5 1.3 1.7 2.0 2.0 2.0 1.9 1.6 2.1 1.8

Hong Kong SAR 5.7 2.2 -2.8 6.6 4.7 2.3 4.3 3.2 3.8 3.9 3.8 3.6 2.8 3.4 3.1

Hungary 2.1 0.6 -6.3 1.0 2.0 -0.6 1.2 2.3 2.7 2.7 2.7 2.5 1.9 2.4 2.1

India 8.9 6.4 5.7 8.8 8.6 6.2 8.0 6.6 7.7 7.9 7.7 7.4 6.2 7.8 7.0

Indonesia 6.2 6.0 4.5 5.9 6.0 5.3 6.1 4.9 5.7 5.9 5.7 5.5 4.1 5.1 4.6

Israel 5.1 4.2 0.8 3.7 4.6 1.9 3.2 3.1 3.7 3.7 3.7 3.5 2.7 3.3 3.0

Italy 1.7 -1.3 -5.0 1.1 0.5 -1.4 -0.1 1.6 1.8 1.9 1.8 1.8 2.0 2.8 2.4

Japan 2.0 -1.2 -5.2 4.2 -0.6 1.0 1.0 1.5 1.8 1.8 1.8 1.7 1.3 1.6 1.5

Korea 4.8 2.3 0.2 6.1 3.9 2.9 3.9 3.8 4.4 4.5 4.4 4.2 3.9 5.0 4.4

Malaysia 5.7 4.7 -1.7 6.8 5.0 3.6 4.9 3.9 4.6 4.7 4.6 4.4 3.3 4.1 3.7

Mexico 2.9 1.5 -6.5 5.0 3.5 3.1 3.7 4.3 5.0 5.1 5.0 4.8 4.2 5.4 4.8

Netherlands 2.6 1.9 -3.9 1.8 1.7 -0.4 0.8 1.3 1.5 1.5 1.5 1.4 1.1 1.3 1.2

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Table 2.1 Annual real GDP growth rates by country (calendar years) – continued 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

New Zealand 2.8 -0.1 -1.6 2.1 3.2 2.5 3.3 2.3 2.7 2.7 2.7 2.6 1.9 2.4 2.2

Norway 3.5 0.8 -1.4 -0.2 1.5 1.4 1.5 1.7 2.0 2.1 2.0 1.9 1.5 1.8 1.7

Philippines 6.3 3.7 1.1 6.8 5.3 3.1 4.6 3.4 4.0 4.0 4.0 3.8 2.9 3.5 3.2

Poland 6.6 5.0 1.7 3.7 4.0 2.3 3.3 2.9 3.5 3.5 3.5 3.3 2.5 3.1 2.8

Russia 7.0 5.2 -7.9 3.7 4.3 3.2 3.6 3.3 3.9 4.0 3.9 3.7 2.8 3.5 3.1

Singapore 7.5 1.8 -1.3 14.8 4.8 2.7 4.1 3.3 3.8 3.9 3.8 3.7 2.8 3.4 3.1

South Africa 4.7 3.7 -1.8 2.8 3.7 2.1 3.5 2.9 3.4 3.5 3.4 3.3 2.5 3.1 2.8

Spain 3.7 0.9 -3.7 -0.2 0.4 -1.2 -0.4 2.5 3.0 3.1 3.0 2.9 4.1 6.3 5.2

Sweden 3.6 -0.4 -5.1 5.2 3.9 0.6 1.7 2.2 2.6 2.7 2.6 2.5 1.9 2.4 2.1

Switzerland 2.4 1.9 -1.9 2.7 2.1 0.6 1.4 1.3 1.6 1.6 1.6 1.5 1.1 1.4 1.3

Thailand 4.0 2.5 -2.2 7.0 4.3 5.4 4.1 3.8 4.5 4.6 4.5 4.3 3.9 5.1 4.5

Turkey 5.1 0.7 -4.7 8.0 5.5 3.2 3.8 2.8 3.3 3.3 3.3 3.1 2.4 2.9 2.6

United Kingdom 3.1 -0.1 -4.9 1.6 1.0 0.0 1.1 1.6 1.9 2.0 1.9 1.8 1.3 1.6 1.5

United States 1.9 0.0 -2.6 2.9 1.7 1.9 2.0 1.9 2.3 2.3 2.3 2.2 1.4 1.7 1.5

Venezuela 8.0 4.8 -3.3 -2.5 2.5 3.8 2.3 0.8 0.9 0.9 0.9 0.8 0.6 0.8 0.7

Rest of World 10.2 4.4 -1.6 3.5 4.5 3.0 3.5 3.9 4.3 4.6 4.6 4.5 4.0 4.0 4.0

Total world 5.3 2.8 -0.9 4.7 3.7 2.6 3.4 3.7 4.2 4.4 4.4 4.2 3.4 4.2 3.8

Major trading 3.2 1.1 -1.6 4.3 2.2 2.0 2.5 3.0 3.4 3.5 3.5 3.4 2.5 3.1 2.8

G7 2.1 -0.2 -3.6 2.8 1.3 1.2 1.5 1.8 2.1 2.1 2.1 2.0 1.4 1.8 1.6

ASIA 7.3 5.1 3.5 8.0 5.6 4.0 5.4 5.8 6.5 6.7 6.6 6.3 5.0 6.3 5.7

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2.2 The Australian economic outlook

2.2.1 The general growth outlook

Over the June to September quarters 2011 growth expectations of the Australian economy were significantly marked down by both households and consumers. By the end of the year the lowering of expectations was clearly translated into lower realised growth. The most notable case in this regard was the housing sector, where over the last months of 2011 dwelling approvals were tracking well below expectations. Growth in the December quarter was at an annualised 1.6%.

The proximate cause of this was the decline in household confidence and business expectations. Compared to the June quarter, the index of consumer confidence fell by 10%. The Westpac-ACCI Survey of expected industrial trends fell by 30% between the March quarter 2011 and the September quarter 2011. It has since recovered but is running at 25% below its March peak.

Despite the recent 0.5 basis point reduction in interest rates, and the return of the headline unemployment rate to below 5%, the Westpac-Melbourne Institute Index of Consumer Confidence is likely to return a value for the June quarter 2012, given the April-May month readings, which will be near the September quarter lows.

In the past, the confidence indicators seemed to reflect little more than what the available indicators were describing about the state of the economy. On those occasions that the confidence indicators were out of kilter with the indicators, the confidence readings appeared to have little impact on actual economic outcomes in the months that followed. That is, the experience over the last nine months appears to be one of the few occasions when the confidence indicators appear to be driving economic outcomes.

The question is why is this occurring now? The mining boom is also going to another level which, on the historical record, should have delivered a GDP growth rate of 4% plus for 2011-12 instead of the projected, very modest in the circumstances, 2.6% with a similar outcome projected for 2012-13.

The list of factors which appears to be playing a role in this outcome is as follows.

1. World economic conditions

The rapid decline in expectations/confidence that occurred during the peak of the Euro crisis (which has now returned) and is sometimes considered by some to be the major reason for the decline. The problem with this explanation is that the more immediate (to Australia) of the Asian Economic Crisis of late 1997 had little impact on consumer confidence, while the impact on business expectations was muted.

However, it is likely that changes in domestic circumstances have made Australian households and businesses more sensitive to negative influences from overseas.

2. High household debt and low household savings

In 1997 the household debt to income ratio was half what it is currently. The debt service ratio has increased from 9% to 18%. Households have far less scope to respond to negative economic shocks, either by increasing debt or by reducing “unnecessary” consumption expenditure. This is because for many households

12

consumption expenditure has been reduced to minimum levels because of the demands of debt servicing costs.

The household savings ratio has returned to near double digit levels. However, the savings ratio is only equal to the superannuation contractual savings rate, implying zero net savings. The picture that emerges from this is a large portion of households who depend on cash flow on a pay-day to pay-day basis with little capacity to absorb negative shocks to cash flows, ranging from unexpected cost imposts to illness and unemployment.

In this environment information which indicates an increased risk of loss of income would have a significant negative impact on confidence and expectations.

3. Stagnant expectations of capital gain

The 2002 to 2008 period was the period of the largest increase in household debt relative to income. The average net household wealth to income ratio was around 7.5. The current stagnation in equity and dwelling prices means that the projected ratio over the 2012 and 2013 years will be around 6.5. In the September quarter 2011 the ratio was 6.7 compared to 7.5 a year earlier. This represents a significant fall in gross wealth (financial assets plus dwelling and non-corporation) business capital stock compared to financial liabilities. This by itself would have had a significant downward impact on expectations and confidence, and it would also lead to downward adjustment in expectations of future capital gain. The adjustment of expectations to the reality that high household debt to wealth ratios are likely to continue well into the medium-term future, compared to previous expectations of falling debt to gross wealth ratios, would have produced a significant increase in unhappiness and, therefore, loss of consumer confidence. This adjustment in expectations would have occurred over 2011.

In this case a major boost to consumer confidence will occur when established house prices recover, reinforced by recovery in equity prices. For the next one to two years the prices of established dwellings are stagnant. Significant growth is delayed until after 2015. When this occurs, as will be seen below, household consumption expenditure growth accelerates.

4. The long duration of the mining boom

The current mining expansion will have the longest duration of all episodes of mining expansion since the episodes of mining expansion commenced in the late 1960s. In the early stages of the current expansion, non-resource businesses would have been assuming that the boom would have come to an end after four to six years with the result that the exchange rate would return to cost competitive levels of around 70 cents to the US dollar. The result was that the initial response to the boom by non-resource businesses was to wait until the boom ended with commodity prices returning to trend levels rather than make substantial changes to business operations.

The onset of the GFC appeared to validate this view. However, what happened was unprecedented. In post World War II recessions, the high income countries have led the world out of recession with low income and emerging economies lagging the recovery of high income countries. The post GFC recovery has been characterised by the opposite dynamic. The high income countries have stagnated and the emerging and developing economies have led the world recovery from recession. This in turn has maintained high commodity prices and a high Australian exchange rate.

With the commitment of a number of large scale LNG plants and the ongoing expansion in the coal and iron ore industries, it is now become apparent that the current boom will continue for a number of years yet: at least to 2016. The result will be

13

the continuation of high commodity prices and high exchange rates, with little respite until at least 2015. Whether or not this proves correct, the expectation that this was going to happen began to take hold over 2011 with the result that many non-resource import competing businesses realised that restructure (shedding labour and production activities in Australia) could no longer be postponed. This adjustment to expectations no doubt explained much of the downward adjustment to business expectations over 2011.

Employers will quickly sense that restructuring and possible employment losses are likely to come to the fore over 2012 and 2013. This in turn will place downward pressure on consumer confidence.

2.2.2 Other negative structural trends

The maturing of e-commerce is now placing tens of thousands of employment positions at risk in the retail and wholesale industries. These employment losses will evolve over the next few years. However, again employees and employers will be aware that this structural change will proceed relentlessly over the next few years, which will again undermine current expectations and confidence.

Other more short-term factors that could be undermining confidence and expectations are:

(i) the unpopularity of the Federal Government; and

(ii) the introduction of the carbon tax on 1 July 2012.

2.2.3 Dutch Disease

The impact of the Dutch Disease is fully evident in the Gross State Product estimates for 2011-12. For this fiscal year the projected growth rate for New South Wales is 1% per annum and 1.5% for Victoria. In contrast Queensland and Western Australia are projected to grow at 4.7% and 6.7% respectively. The relative growth rates are similar for 2012-13 with only marginal improvements in the growth rates of New South Wales and Victoria.

2.2.4 GDP formation

The quarterly growth in GDP for the March quarter 2012 was 1.3% this followed from 0.6% in December quarter 2011.

The projected fiscal year growth for 2011-12 is 2.6% with another 2.6% projected for 2012-13. That is, growth has been revised downwards from the 3% mark previously expected. The main reasons for the downward adjustment are downward revisions in private consumption expenditure and private dwelling expenditures. Previously, private dwelling expenditures were expected, at worst, to make little contribution to growth over 2011-12 and 2012-13. The expectation in the current bulletin is that private dwelling expenditure will reduce overall GDP growth by 0.2 percentage points in 2011-12 and -0.3 percentage points the following fiscal year. In 2012-13 private consumption expenditure is projected to add 1.5 percentage points to GDP growth. Other than the 2008-09 year, when the contribution of private consumption expenditure to growth was zero, the projected 2012-13 contribution is the lowest since 1993-94.

14

2.2.5 Consumption expenditure

The projected private consumption expenditure in accordance with consumer confidence suggests a higher household savings ratio in the year ahead. In the next six quarters, the household savings rate is projected to be 10.5%, an increase of 1 percentage point over the 2010-11 fiscal year average. The reality is that equity withdrawal is still occurring. By equity withdrawal is meant the borrowing to finance consumption expenditure. Over the last four quarters, it has been averaging $12 billion a quarter, or $50 billion a year. The headline savings ratio would have to be around 12% to 13% before equity withdrawal fell to zero. This is because although the superannuation savings ratio is 9%, because of the unequal distribution of income with high income households having relatively high savings ratios, the overall headline savings ratio would have to be around 4 percentage points higher than the superannuation savings ratio to ensure the savings ratio of lower income rates took average levels that required a low net level of equity withdrawal.

In this context a key question would be the extent that the reduction in interest rates will stimulate domestic demand. It is true that interest cost reductions for highly indebted households will largely flow into additional consumption. However, household financial assets are two and a half times household financial liabilities. A large part of household financial assets are in superannuation funds which cannot be directly accessed for current consumption. That part of financial assets where the returns can be applied to consumption is similar to the level of liabilities. This means that the direct expenditure stimulus from an interest rate reduction from reduction in debt costs is more or less neutralised by the reduction in interest income from financial assets.

This does not mean that when the environment is right that interest rate reductions will not have a powerful impact on the economy. The right conditions for interest rates to have a powerful stimulus on the economy are when two or more of the following prevail:

(i) the economy is recovering from a downturn/recession;

(ii) debt to household income ratios are low;

(iii) longer-run expectations are positive in regard to growth; and

(iv) the expectation of strong capital gains in housing.

This is not to say that recent interest rate reductions will not have some stimulatory impact on the economy. What is being said is that the stimulus effect is likely to be significantly more subdued than what has been the case in the past.

There will be a decline in the household debt to income ratio over the next three years. By the beginning of 2016 the household debt to disposable income ratio is down from 1.84 at the end of 2011. This is a period of relatively high headline growth because of the mining production surge from the mining investment over 2011 to 2014. Expenditures of the future become more positive and the household savings ratio falls. As a result, over the 2015 to 2018 period the contribution of private consumption to GDP growth increases to an average of 2.1 percentage points, with GDP growth averaging 3.6% over the 2016 to 2018 period.

Unfortunately, debt to income ratios by 2019 return to the current high levels and consumption expenditure growth is curtailed. In 2020 the contribution of private consumption expenditure to GDP growth falls to a historical low of 1.3 percentage points.

15

2.2.6 Other GDP demand components

The powerful influence of the current acceleration in mining investment on the Australian economy can be seen from the contribution of non-dwelling construction and equipment to GDP growth. The average contribution over the 2011-12 and 2012-13 fiscal years is 1.5 percentage points, while for equipment it is 1.1 percentage points, giving a total of 2.6 percentage points. This is the same as the average GDP growth rate over the period.

The main reason why the strong stimulus to demand from the mining expansion is not translated into strong overall GDP growth is the strong negative contribution to growth from imports. Over 2011-12 and 2012-13, the contribution of imports to GDP growth is -2.2 percentage points. In part this is due to the relatively high import content of mining investment over this cycle compared to the 2006-2010 period. In part it is due to the high exchange rate increasing the import content of general demand components. Indeed, the negative contribution of imports to GDP growth over 2011-12 and 2012-13 is the highest on historical record, with the exception of 2007-08.

The mining investment profile peaks in September 2013. However, the decline is modest with quality mining investment remaining in the relatively narrow range of $7.0 to $8.3 billion for the remainder of the projection period. As a result, despite expansion in non-mining private investment, the contribution of private investment to this growth post 2015 is negative.

Besides sluggish consumption growth and increasing import propensity, the other main reason for low GDP growth over the next two years is the low contribution from public sector demand. The projected contribution to GDP growth from public consumption expenditure of 0.2 percentage points will be the lowest since 1993-94. The negative contribution from public investment expenditure over the 2011-12 and 2012-13 years is the lowest since 1987-88. After 2013-14, public sector demand is expected to make a contribution to growth a little above its contribution since the 1980s. The reason for this will be the need to undertake major transport infrastructure investments which will not be able to e deferred because of the now transparent result that part of the reason for the decline in national productivity is the under-investment in transport infrastructure since the 1980s.

This contributes to the recovery in GDP growth over the period 2016 to 2018. Also driving growth during this period will be a high contribution of exports to GDP growth. The average contribution of imports to GDP growth over this period is 1.5 percentage points, due mainly from the production surge from completed mining projects in general, and LNG projects in particular. This also reduces the current account deficit as a % of GDP from 6% in 2015 to the 3% range by the middle of 2017. This results in keeping interest rates low.

After 2018, balance of payments pressures will force a general curtailment in the rate of growth of general demand expansion with the current account deficit as a % of GDP returning to the 5% plus range.

2.2.7 The balance of payments

The fall indicators underlying the formation of Australia's balance of payments are given in the attached table. In the short term due to the high import content of mining investment and weakness in commodity prices plus the general increased import penetration due to the current high Australian exchange rate will mean a return to high current account deficits as a per cent of GDP. With the major mining production expansion that would be associated with the completion of projects in 2015 on the Australian current account deficit as a per cent of GDP will return to relatively low levels over the middle period of the projection horizon along

16

with the firming of real commodity prices due to the acceleration in the world economic growth.

However, a subdued outlook in relation to the continuation of the mining boom post 2017, for reasons mentioned elsewhere above, results in an upward trend towards high current account deficits late projection period.

2.2.8 The exchange rate

As indicated by the accompanying figure the outlook for the exchange rate over the next two years follows the outlook for real commodity prices with the downward trend reflecting the current weakness in the world economy in general and the Chinese economy in particular. Over the medium term real commodity prices are projected to recover as world economic growth accelerates. Over the impact of this on the exchange rate is projected to the subdued. Firstly this is expected to be in response to the likelihood of the return of high current account deficits as a per cent of GDP over the next 2 to 3 years. Although low current account deficits return as the production effects of the current and projected mining investment are realised this is expected to be offset by the realisation of the extent of the damage that the Dutch disease has imposed on the structure of the Australian economy. Late in the projection period the issues of Australian energy and mineral access to Chinese markets and trading relationships in the Western Pacific generally is expected to further dampen long-run expectations of Australian economic growth and hence sentiment towards the Australian currency.

2.2.9 Population

Australia's lack of focus on skills formation for its residents along with increasing the mobility of the labour force will mean that Australia will continue to rely on migration to meet labour market needs over and above employment increases that exceed 100,000 on an annual basis. This is a simple rule which is determined Australian migration intake over and above the intake based on refugee and family reunion criteria. As the average annual employment increase is of the order of 160,000 over the projection period this means that the additional migration to accommodate labour market requirements will be the order of 120,000. The expected annual average net migration intake is therefore expected to be of the order of 220,000.

2.2.10 Interest rates

The current weakness of the Australian economy driven by the decline in confidence has resulted in interest rates that are lower than expected. In part this is also due to the inflation rate being lower than expected. However the bad news in this regard is that the lower-than-expected inflation rate has been driven by downward press pressure on business profit margins which will herald even weaker growth in the short-term future. As a result the outlook for inflation over the next 12 months has been downgraded from one of the closer to 4% to an outlook where inflation is running at about 3.5% after the introduction of a carbon tax. Continued economic weakness will keep inflation within reasonable bounds over the next 2 to 3 years. Profit margin recovery will have to wait until the general economic growth rate accelerates from 2016.

17

2.2.11 Employment and unemployment

The headline unemployment rate is of little value in judging the underlying strength of the economy is these days it is almost fully controlled by governments. This is done by shifting the unemployed in and out of the forms of working age social security support in order to stabilise the measured unemployment rate. The unemployment rate is expected to increase steadily over the next few years reaching a peak of 6% by 2016. However the headline unemployment rate by 2016 would be at least 1 percentage point higher if not, the workforce participation rate is projected to fall by 1 percentage point compared to current levels.

This mechanism is probably now well understood by the general public which explains why falls in the unemployment rate these days do little to improve confidence.

Figure 2.3: Nominal and real wages growth and CPI inflation rate – cumulative four quarter span basis (%)

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

Nominal wages $ per hour Real wages (CPI adjusted) CPI

18

Figure 2.4: $A/$US and weighted average exchange rate

30

40

50

60

70

80

90

100

0.4

0.5

0.6

0.7

0.8

0.9

1.0

1.1

Weighted average exchange rate

$A/$US exchange rate

$A/$US exchange rate (LHS) Weighted average exchange rate (RHS)

Figure 2.5: Australian net immigration and population increase

0

50000

100000

150000

200000

250000

300000

350000

400000

450000

500000

Australia - population increase Australia - net immigration

19

Figure 2.6: Real and nominal 90 day bill rate

-2

-1

0

1

2

3

4

5

6

7

8

9

Real interest rate nominal interest rate

Figure 2.7: Employment growth and unemployment (%)

-

1

2

3

4

5

6

7

8

Jun-

01Ja

n-02

Au g

-02

Mar

-03

Oct

-03

Ma y

-04

Dec

-04

Jul-0

5Fe

b-06

Se p

-06

Apr

-07

Nov

-07

Jun-

08Ja

n-09

Au g

-09

Mar

-10

Oct

-10

Ma y

-11

Dec

-11

Jul-1

2Fe

b-13

Se p

-13

Apr

-14

Nov

-14

Jun-

15Ja

n-16

Au g

-16

Mar

-17

Oct

-17

Ma y

-18

Dec

-18

Jul-1

9Fe

b-20

Se p

-20

Apr

-21

Employment growth four quarter span basis Unemployment

20

Table 2.2(a) Australian GDP demand side GDP formation in $CVM – growth rates (%)

Final consumption expenditure: Households

Private: dwellings:

Total

New non-dwelling

cons investment -

(exc asset sales) seas.

adj.

GFCF: Private:

machinery & equip:

New

Total private equipment

and con-struction

Gross fixed capital

formation: Private:

Total

Final consumption expenditure:

General govt: Total

New public equipment

and con-struction

investment - (exc asset

sales)

Total public

demand

Total final

demand

Stocks and stat discrep-

ancy

Exports of goods

and services

Imports of goods

and services GDP

Fiscal year growth rates (except stocks which are in percentage point contribution to GDP growth) 2000 4.2 12.3 5.2 13.1 10.2 10.3 3.3 -0.7 2.6 5.0 -1.1 9.7 11.9 3.8 2001 3.5 -21.9 -24.8 6.8 -15.5 -9.9 1.7 1.8 1.7 0.3 -0.1 8.2 -1.0 1.9 2002 2.9 19.6 6.5 3.2 10.6 9.5 3.1 6.9 3.8 4.4 0.3 -0.7 1.4 3.9 2003 4.0 12.6 23.9 17.2 17.0 14.5 3.0 4.7 3.3 6.0 -0.6 0.2 13.1 3.2 2004 5.0 6.5 4.1 16.2 8.7 9.6 4.2 5.7 4.5 5.9 0.2 1.2 12.7 4.1 2005 4.4 0.5 8.0 15.0 7.2 6.2 3.2 10.5 4.5 4.8 -0.2 3.5 12.2 3.2 2006 2.9 -2.6 21.0 15.2 10.1 9.4 2.5 8.7 3.6 4.5 -0.6 2.7 7.2 3.0 2007 4.4 -0.2 12.3 3.1 4.8 4.9 3.7 6.0 4.2 4.5 0.3 4.0 9.4 3.8 2008 4.7 1.9 7.1 18.5 9.5 10.0 3.2 7.9 4.2 5.8 0.0 3.7 14.6 3.8 2009 0.1 -1.5 10.1 -2.6 1.8 0.2 2.8 7.2 3.7 0.9 -0.5 1.7 -3.3 1.4 2010 2.5 1.2 -8.1 -4.3 -4.1 -2.8 1.8 24.0 6.6 2.3 0.1 5.3 5.6 2.3 2011 3.1 3.0 8.8 3.0 4.9 3.9 2.8 3.8 3.1 3.2 0.6 0.4 10.4 1.9 2012 3.7 -3.2 39.3 14.8 17.8 15.4 1.4 -8.8 -1.2 5.0 0.6 3.4 14.7 3.2 2013 3.1 0.6 12.8 41.4 19.4 15.7 1.0 -9.6 -1.5 5.0 0.4 2.6 15.1 2.5 2014 3.3 5.1 0.0 -7.3 -2.0 -0.8 2.5 -11.9 -0.6 1.4 -0.2 2.8 -3.6 2.8 2015 3.5 2.6 0.3 -6.8 -2.0 -1.2 3.4 10.7 4.8 2.6 0.4 3.2 0.3 3.7 2016 3.7 3.2 -8.7 -9.2 -6.3 -4.6 3.7 11.1 5.2 2.0 -0.6 7.1 -0.8 3.1 2017 3.8 5.9 -10.0 -7.4 -5.2 -3.1 3.3 5.2 3.7 2.2 0.4 7.9 0.3 4.2 2018 3.7 7.2 -4.1 0.9 0.8 2.1 3.1 7.4 4.0 3.4 -0.2 7.5 5.0 3.7 2019 3.7 -0.1 4.0 8.5 4.4 3.4 2.9 5.5 3.5 3.6 -0.2 4.9 6.0 3.1 2020 3.3 2.7 -0.6 -4.2 -1.0 -0.1 2.7 8.2 4.0 2.7 -0.3 4.4 2.7 2.8 2021 2.9 8.2 -2.4 -0.7 -1.2 0.8 2.2 1.9 2.1 2.3 3.6 4.2 2.6 2022 2.7 -100.0 -4.7 -0.9 -2.0 -23.6 1.9 -4.5 0.3 -3.8 3.1 2.8 1.8

21

Table 2.2(b) Australian GDP demand side GDP formation in $CVM – growth rates (%) – continued

Final consumption expenditure: Households

Private: Dwellings:

Total

New non-dwelling

cons investment -

(excluding asset sales)

seas. adj.

GFCF: Private:

Machinery & equip:

New

Total private equipment

and con-struction

Gross fixed capital

formation: Private:

Total

Final consumption expenditure:

General govt: Total

New public equipment

and con-struction

investment - (excluding

asset sales)

Total public

demand

Total final

demand

Stocks and stat discrep-

ancy

Exports of goods

and services

Imports of goods

and services GDP

Fiscal year ending – Percentage point contribution to GDP growth 2000 2.2 0.7 0.2 0.5 1.5 1.7 0.6 0.0 0.6 4.6 -1.1 1.8 -1.5 3.8 2001 1.8 -1.4 -1.2 0.3 -2.3 -1.8 0.3 0.1 0.4 0.3 -0.1 1.6 0.1 1.9 2002 1.6 1.0 0.2 0.1 1.3 1.5 0.6 0.3 0.8 4.0 0.3 -0.1 -0.2 3.9 2003 2.2 0.7 0.9 0.7 2.3 2.4 0.5 0.2 0.7 5.5 -0.6 0.0 -1.7 3.2 2004 2.7 0.4 0.2 0.7 1.3 1.8 0.8 0.2 1.0 5.5 0.2 0.2 -1.8 4.1 2005 2.4 0.0 0.3 0.8 1.1 1.2 0.6 0.4 1.0 4.6 -0.2 0.7 -1.9 3.2 2006 1.6 -0.2 1.0 0.9 1.7 1.9 0.4 0.4 0.8 4.4 -0.6 0.5 -1.2 3.0 2007 2.4 0.0 0.7 0.2 0.8 1.0 0.7 0.3 0.9 4.4 0.3 0.8 -1.6 3.8 2008 2.6 0.1 0.4 1.2 1.7 2.1 0.6 0.4 0.9 5.7 0.0 0.7 -2.7 3.8 2009 0.0 -0.1 0.6 -0.2 0.3 0.0 0.5 0.3 0.8 0.9 -0.5 0.3 0.7 1.4 2010 1.4 0.1 -0.5 -0.3 -0.8 -0.6 0.3 1.2 1.5 2.3 0.1 1.0 -1.1 2.3 2011 1.7 0.2 0.5 0.2 0.9 0.8 0.5 0.2 0.7 3.3 0.6 0.1 -2.1 1.9 2012 2.1 -0.2 2.4 1.0 3.2 3.4 0.3 -0.6 -0.3 5.1 0.6 0.7 -3.2 3.2 2013 1.8 -0.1 1.1 3.0 4.0 3.8 0.2 -0.5 -0.3 5.2 0.4 0.5 -3.6 2.5 2014 1.9 0.3 0.0 -0.7 -0.5 -0.2 0.4 -0.6 -0.1 1.5 -0.2 0.5 1.0 2.8 2015 2.0 0.1 0.0 -0.6 -0.5 -0.3 0.6 0.4 1.1 2.7 0.4 0.6 -0.1 3.7 2016 2.1 0.1 -0.8 -0.8 -1.4 -1.2 0.6 0.5 1.1 2.1 -0.6 1.4 0.2 3.1 2017 2.2 0.3 -0.8 -0.5 -1.0 -0.7 0.6 0.3 0.8 2.3 0.4 1.6 -0.1 4.2 2018 2.1 0.3 -0.3 0.1 0.1 0.5 0.5 0.4 0.9 3.5 -0.2 1.6 -1.1 3.7 2019 2.1 0.0 0.2 0.5 0.8 0.7 0.5 0.3 0.8 3.6 -0.2 1.1 -1.4 3.1 2020 1.9 0.1 0.0 -0.3 -0.2 0.0 0.5 0.4 0.9 2.8 -0.3 1.0 -0.6 2.8 2021 1.6 0.4 -0.2 -0.1 -0.3 0.2 0.4 0.1 0.5 2.3 0.4 0.7 -0.9 2.6 2022 1.5 -4.9 -0.4 -0.1 -0.5 -7.1 0.3 -0.2 0.1 -3.8 5.6 0.6 -0.6 1.8 Average annual growth rate – per cent Average 2000-2010 3.5 2.6 5.9 9.2 5.5 5.6 2.9 7.5 3.9 4.0 -0.2 3.6 7.6 3.1 2011 3.1 3.0 8.8 3.0 4.9 3.9 2.8 3.8 3.1 3.2 0.6 0.4 10.4 1.9 2012 3.7 -3.2 39.3 14.8 17.8 15.4 1.4 -8.8 -1.2 5.0 0.6 3.4 14.7 3.2 2013 3.1 0.6 12.8 41.4 19.4 15.7 1.0 -9.6 -1.5 5.0 0.4 2.6 15.1 2.5 2014 3.3 5.1 0.0 -7.3 -2.0 -0.8 2.5 -11.9 -0.6 1.4 -0.2 2.8 -3.6 2.8 2015 3.5 2.6 0.3 -6.8 -2.0 -1.2 3.4 10.7 4.8 2.6 0.4 3.2 0.3 3.7 Average 2016-2022 3.6 3.8 -3.9 -2.3 -1.4 -0.4 3.1 7.5 4.1 2.8 -0.2 6.4 2.6 3.4 Average annual contribution to GDP growth rate - percentage point Average 2000-2010 1.9 0.1 0.3 0.4 0.8 1.0 0.5 0.3 0.9 3.8 -0.2 0.7 -1.2 3.1 2011 1.7 0.2 0.5 0.2 0.9 0.8 0.5 0.2 0.7 3.3 0.6 0.1 -2.1 1.9 2012 2.1 -0.2 2.4 1.0 3.2 3.4 0.3 -0.6 -0.3 5.1 0.6 0.7 -3.2 3.2 2013 1.8 -0.1 1.1 3.0 4.0 3.8 0.2 -0.5 -0.3 5.2 0.4 0.5 -3.6 2.5 2014 1.9 0.3 0.0 -0.7 -0.5 -0.2 0.4 -0.6 -0.1 1.5 -0.2 0.5 1.0 2.8 2015 2.0 0.1 0.0 -0.6 -0.5 -0.3 0.6 0.4 1.1 2.7 0.4 0.6 -0.1 3.7 Average 2016-2022 2.1 0.2 -0.3 -0.2 -0.3 -0.1 0.5 0.4 0.9 2.8 -0.2 1.3 -0.6 3.4

22

Table 2.3 Formation of Australian current account balance

Real imports:

Fuels (CVM$m)

Terms of trade

Balance of trade ($m)

Direct investment

income paid

overseas ($m)

Direct investment

income from

overseas ($m)

Net interest income

paid overseas

($m)

Net balance on

income flows ($m)

Current account balance

($m)

Current account

balance – % of GDP

($m) Oil – $US a

barrel

Net inter-national

debt (% of GDP)

2000 17064.0 0.6 -13051.8 19305.0 12639.0 12053.0 -18719.0 -31482.0 -4.8 24.4 38.2

2001 16752.0 0.6 1296.9 21272.0 14841.0 13130.0 -19561.0 -17682.0 -2.5 28.1 43.0

2002 17238.0 0.6 333.5 21569.0 13947.0 12608.0 -20230.0 -19160.0 -2.5 22.7 41.4

2003 18074.0 0.7 -16523.9 25966.0 14432.0 10839.0 -22373.0 -38223.0 -4.8 27.9 43.8

2004 18705.0 0.7 -22198.3 26895.0 15022.0 12563.0 -24436.0 -46355.0 -5.4 31.4 42.8

2005 21392.0 0.8 -23260.2 36180.0 18374.0 16313.0 -34119.0 -57523.0 -6.3 45.0 44.8

2006 21377.0 0.9 -14764.0 42593.0 21516.0 17791.0 -38868.0 -54296.0 -5.5 61.5 47.4

2007 22235.0 0.9 -12318.5 53180.0 28992.0 24396.0 -48584.0 -61087.0 -5.6 62.8 48.6

2008 24258.0 1.0 -24246.5 55013.0 33580.0 27102.0 -48535.0 -72675.0 -6.2 94.4 50.4

2009 24855.0 1.0 7059.0 50085.0 33742.0 27713.0 -44056.0 -37096.0 -3.0 68.7 52.4

2010 26494.0 1.0 -4521.6 48814.0 24099.0 25808.0 -50523.0 -56110.0 -4.4 74.7 50.9

2011 28782.0 1.2 20752.3 57825.0 29156.0 25038.0 -53707.0 -33584.0 -2.4 92.7 48.1

2012 29700.1 1.2 -6745.2 55009.1 30572.5 23192.0 -47628.6 -54787.0 -3.7 104.7 51.2

2013 31673.7 1.2 -63590.8 55412.0 31088.2 27257.1 -51580.9 -115171.8 -7.6 95.5 55.9

2014 33720.2 1.1 -62873.5 62259.9 35623.2 33413.9 -60050.6 -122924.1 -7.8 99.0 64.6

2015 36521.4 1.1 -61915.0 68919.7 39030.7 39203.4 -69092.4 -131007.4 -7.8 103.3 69.9

2016 39413.4 1.1 -35204.5 79071.6 44930.2 44238.8 -78380.2 -113584.6 -6.4 116.8 73.8

2017 42834.8 1.1 4463.8 91213.3 51835.3 47277.9 -86656.0 -82192.1 -4.3 125.9 72.9

2018 44696.2 1.1 17489.3 97401.4 55299.4 48853.1 -90955.1 -73465.7 -3.7 129.7 72.2

2019 48397.3 1.1 11381.8 111242.1 63178.6 54641.9 -102705.3 -91323.5 -4.3 134.4 72.2

2020 52149.8 1.1 14233.2 123173.8 69974.2 62528.1 -115727.7 -101494.5 -4.5 138.4 73.6

2021 17064.0 0.6 -13051.8 19305.0 12639.0 12053.0 -18719.0 -31482.0 -4.8 24.4 38.2

2022 16752.0 0.6 1296.9 21272.0 14841.0 13130.0 -19561.0 -17682.0 -2.5 28.1 43.0

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2.3 The Queensland economic outlook

Relative to the rest of Australia, the Queensland economy has been significantly adversely affected by the World economic instability since 2008. Average gross state product growth over the 3 years 2009 to 2011 was 0.8% per annum. Over the same period the Australian average annual GDP growth rate was just under 2% per annum.

The main reason for Queensland’s relatively poor economic performance is the poor growth in private consumption expenditure over 2008-09 and 2009-10. This reflects the pre GFC economic growth driver of rising equity in dwellings from rapidly increasing established house prices, share prices, population growth and migrants from interstate relatively liquid from sale of property in the State of origin. The GFC ended this growth driver and turned it negative as share and established house prices fell.

In addition the strong growth in Queensland established house prices up to 2008 both forced and encouraged Queensland households to borrow and spend both on consumption and dwelling investment. As a result the Queensland household debt to net disposable income ratio is estimated by NIEIR to have increased from around 100% income in 182% of income at the end of 2011. That is Queensland households have now caught up to New South Wales debt levels where high debt levels have constrained New South Wales growth for the past decade.

The qualitative the impact of this is evident from the data presented in table 2.4. Over the 2009 to 2011 years the percentage point contribution of private consumption expenditure to the Queensland growth rate was 0.8% per annum. This stands in sharp contrast to the 2.8 percentage point per annum contribution over the period 2005 to 2008. This coupled with the fact that the contribution of the mining sector to Queens land economic growth over the 2009 to 2011 period was negligible is the dominant explanation for the sharp downturn in Queensland growth rates over the past three years.

It is expected that Queensland’s growth will return to the 4% plus level in 2011-12, in part driven by the recovery from the floods and cyclones and in part by the build-up in LNG driven mining investment. Also an important driver is that the increase in Queensland household savings rate necessary to stabilise debt to income ratios has been completed with the result of private consumption expenditure can now grow in line with household disposable income growth. This will enable private household consumption expenditure to contribute to percentage points to the 2012 Queensland GSP growth rate.

Over the next few years is expected that Queensland private consumption expenditure will contribute around 2 percentage points to the Queensland GSP growth rate. However the contribution will not return to the high levels generated over the first few years of this century. Debt saturation constraints will ensure that on average this is the case though excess expenditures may occur in one or two years but will not be able to be sustained.

Over the fiscal years 2014 to 2017, Queensland’s GSP is projected to average 3.8% per annum with a peak 4.5% growth rate predicted for 2015-16. This is the year the production from the LNG projects ramps up to significant levels. The importance of mining, both from the investment and production perspectives, can be seen from Table 2.4. Over the fiscal years 2013 to 2018, the average contribution of mining production to Queensland GSP growth is estimated at 1.2 percentage points, or a third of the average GSP growth rate and approaching one half in flow-on effects are allowed for through the standard multiplier process.

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From the same table the average contribution of private business investment to Queensland GSP is 3.9 percentage points over 2012 to 2014. If this is reduced by two thirds to account for the import content, the contribution is still 1.3 percentage points. As this is mainly driven by the increase in mining investment, then the total contribution of mining to Queensland’s GSP growth is dominant in driving medium term Queensland economic growth.

After 2014 the contribution of investment to Queensland GSP growth turns negative. However, after 2016 the flow-on impact on production allows mining to continue making a significant contribution to Queensland GSP growth. The average Queensland GSP growth rate over the 2019 to 2022 period is 3.2%, which is below the preceding period trend growth. This reflects the contribution in percentage point terms of the mining sector to Queensland GSP growth falling to 0.8% per annum over this period. This reflects the risks of this period in terms of lower world economic growth from political instability in the Western Pacific to likely downgrades two Queensland mining sector growth rates from such factors as the rapid development of shale gas resources in China and elsewhere which will reduce the demand for Queensland coal. Also playing a part will be gas supply constraints preventing any further major expansion in LNG exports.

This report adopts the PIFU projections for Queensland population growth. This is because the projections for the medium scenario appear realistic in the context of increasing housing shortages and therefore limiting the ability of the Queensland economy to attract migrants. As a result of Queensland population growth rate over the medium term is approximately 2% per annum falling to 1.8% per annum by the end of the projection period. From table 2.5 the level of net immigration from all sources generally falls in the range of between 45 and 50,000 per annum.

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Table 2.4 Formation of Queensland Gross State Product 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Annual growth – $CVM m (%) Private consumption expenditure 5.0 4.9 6.3 -0.1 1.3 3.2 3.6 3.2 3.9 4.1 5.1 4.3 4.4 4.3 4.4 4.9 4.3 Government expenditure 2.8 5.1 4.1 2.6 2.4 3.5 0.4 4.4 4.7 3.8 4.1 5.2 3.1 2.8 3.8 2.2 1.2 Dwelling investment 2.5 5.7 -0.6 -8.4 -4.9 -13.0 -1.4 0.1 15.4 9.3 8.9 8.3 6.3 -3.3 1.9 4.4 -6.3 Private investment 20.6 14.8 16.4 1.7 -13.8 17.2 36.9 13.4 16.4 -4.0 -12.0 -9.6 -6.7 -3.8 -1.0 0.0 -0.3 Public investment 10.1 23.2 12.7 6.5 12.4 -7.7 -7.0 -5.2 -3.0 -0.9 4.3 -3.0 4.0 3.7 9.9 11.9 6.6 Total state final demand 6.9 7.7 7.4 0.0 -0.5 3.0 7.5 4.8 7.2 2.0 1.2 1.5 2.3 2.6 4.0 4.6 2.7 Net trade and stocks – percentage point contribution -0.7 -1.6 -2.4 0.6 2.2 -2.7 -2.7 -1.2 -4.0 1.2 3.3 2.7 1.7 1.5 0.3 -1.5 -0.7 Gross State Product 5.6 5.7 4.8 0.6 1.7 0.2 4.8 3.7 3.4 3.3 4.5 4.2 3.9 3.9 4.1 2.9 2.0 Percentage point contribution to Queensland GSP growth Private consumption expenditure 2.5 2.5 3.2 0.0 0.7 1.6 1.9 1.7 2.0 2.1 2.7 2.2 2.3 2.2 2.2 2.5 2.1 Government expenditure 0.4 0.8 0.6 0.4 0.4 0.6 0.1 0.7 0.8 0.6 0.7 0.9 0.5 0.5 0.6 0.3 0.2 Dwelling investment 0.2 0.5 0.0 -0.7 -0.4 -0.9 -0.1 0.0 0.9 0.5 0.5 0.5 0.4 -0.2 0.1 0.3 -0.3 Private investment 2.4 2.0 2.5 0.3 -2.4 2.5 5.8 2.5 3.3 -0.9 -2.3 -1.7 -1.1 -0.6 -0.1 0.0 -0.1 Public investment 0.6 1.4 0.9 0.5 0.9 -0.6 -0.6 -0.4 -0.2 0.0 0.2 -0.2 0.2 0.2 0.5 0.6 0.4 Total state final demand 6.4 7.3 7.2 0.0 -0.5 2.9 7.5 4.9 7.4 2.1 1.2 1.5 2.2 2.5 3.8 4.4 2.7 Net trade and stocks - percentage point contribution -0.7 -1.6 -2.4 0.6 2.2 -2.7 -2.7 -1.2 -4.0 1.2 3.3 2.7 1.7 1.5 0.3 -1.5 -0.7 Gross State product 5.6 5.7 4.8 0.6 1.7 0.2 4.8 3.7 3.4 3.3 4.5 4.2 3.9 3.9 4.1 2.9 2.0 Supply side contribution to GSP growth – average annual growth rate $CVM Agriculture -1.2 -15.8 8.9 25.3 4.8 9.0 2.9 -10.1 -8.0 -2.1 4.5 -2.6 0.0 4.6 3.6 0.3 2.5 Mining -2.0 2.7 -0.4 2.1 4.4 -7.9 2.5 1.4 13.2 9.4 17.8 9.7 13.9 6.6 5.5 1.9 3.2 Manufacturing 6.3 3.2 7.9 -14.1 -3.8 -3.9 8.2 -8.1 2.5 3.4 7.1 5.4 5.5 4.1 4.5 3.4 1.6 Construction 13.4 12.1 8.2 5.4 -3.3 5.3 16.4 5.8 -1.3 -4.5 -0.8 -0.5 2.4 -0.8 3.3 4.3 -4.7 Tertiary sector 6.2 6.5 4.7 2.0 0.9 0.0 2.9 5.8 3.6 3.9 3.2 4.1 2.4 4.1 3.9 2.9 2.7 Total GSP 5.6 5.7 4.8 0.6 1.7 0.2 4.8 3.7 3.4 3.3 4.5 4.2 3.9 3.9 4.1 2.9 2.0 Supply side contribution to GSP growth – percentage point contribution to growth Agriculture 0.0 -0.4 0.2 0.6 0.1 0.3 0.1 -0.3 -0.2 -0.1 0.1 -0.1 0.0 0.1 0.1 0.0 0.1 Mining -0.2 0.3 0.0 0.2 0.4 -0.8 0.2 0.1 1.1 0.9 1.7 1.1 1.6 0.8 0.7 0.3 0.4 Manufacturing 0.7 0.4 0.9 -1.5 -0.3 -0.3 0.7 -0.7 0.2 0.3 0.5 0.4 0.4 0.3 0.4 0.3 0.1 Construction 1.2 1.2 0.8 0.6 -0.4 0.5 1.7 0.7 -0.2 -0.5 -0.1 0.0 0.2 -0.1 0.3 0.4 -0.4 Tertiary sector 4.2 4.4 3.1 1.3 0.6 0.0 2.0 4.0 2.5 2.7 2.2 2.8 1.7 2.8 2.6 2.0 1.8 Total GSP 5.6 5.7 4.8 0.6 1.7 0.2 4.8 3.7 3.4 3.3 4.5 4.2 3.9 3.9 4.1 2.9 2.0

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Table 2.5 Formation of Queensland population 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Net immigration – overseas and interstate (‘000) 67 56 54 60 33 12 51 50 49 48 47 46 45 44 43 42 42

Natural increase (‘000) 30 32 35 38 40 39 41 43 45 47 48 50 52 53 54 55 56

Total increase (‘000) 97 88 90 99 72 51 92 93 94 94 95 96 96 97 97 97 98

Total population (‘000) 4056 4143 4233 4331 4404 4455 4546 4639 4733 4828 4923 5018 5115 5211 5308 5406 5503

Population growth rate (%) 2.4 2.2 2.2 2.3 1.7 1.2 2.1 2.0 2.0 2.0 2.0 1.9 1.9 1.9 1.9 1.8 1.8

Employment growth rate (%) 4.0 4.8 3.0 2.7 0.9 2.3 1.2 1.6 1.3 3.1 2.2 2.3 2.3 2.4 1.3 1.2 0.9

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Table 2.6 Average annual population change by region (‘000)

1997-2001 2001-2011 2011-2015 2015-2022

Brisbane 26.6 40.4 40.1 40.5Gold Coast 11.6 13.4 13.5 12.7Sunshine Coast 7.5 7.6 7.3 8.4West Moreton 1.0 1.9 2.5 3.6Wide Bay/Burnett 2.3 5.1 5.1 5.9Darling Downs 2.1 2.5 4.0 4.6South West 0.1 0.0 0.1 0.3Fitzroy 0.7 3.1 5.3 5.3Central West 0.0 -0.1 0.1 0.1Mackay 0.8 3.4 5.0 5.1Northern 2.4 3.6 5.2 5.1Far North 2.4 4.4 4.8 4.4North West 0.0 0.0 0.3 0.3Queensland 57.3 85.2 93.3 96.5

2.4 Housing

In the State of the Regions (SOR) report for 2010-11 NIER developed a number of indicators which describe the affordability of housing in each region. The 2011-12 report provided an update and in this report we concentrate on changes in house prices and affordability between the second quarter of 2010 and the second quarter of 2011. The data for the Queensland regions in the SOR report is presented below,

At the Australia wide regional level, average dwelling values in the June quarter 2011 ranged from $200,000 in SA East and NSW Orana up to $980,000 in Sydney Eastern Beaches. In the metropolitan areas the highest values were found in high-status inner-suburban regions with the lowest values in the low-status fringe regions. At a regional level, the range of values was highest in Sydney (the average value in the most expensive region was 2.6 times that in the cheapest), somewhat lower in Melbourne (1.9 times), lower in SEQ (1.5 times) and lower again in Adelaide and Perth (1.3 times). Except for WA Pilbara Kimberley, where the strength of the boom has overwhelmed supply, house prices are lower outside the metropolitan areas, reflecting an abundant supply of low-cost land.

Average dwelling prices drifted downwards between 2010 and 2011, reflecting the passing of the land boom and household debt saturation. However, the trend was not uniform nationally. The largest decrease, of 7%, occurred in Perth Central and presumably reflected either over-supply or the placement of a large proportion of low cost dwellings (apartments?) onto the market. Reductions of average dwelling price of the order of 6% occurred in high-status inner Melbourne, and of the order of 5% along the whole of the SEQ coast as well as in Sydney Eastern Beaches. At the other extreme, average dwelling prices increased in a few regions, 3% in Vic Loddon Mallee and 2% in NSW Illawarra.

In most regions the reduction in average dwelling price combined with an increase in income to produce a decline in the average ratio of dwelling prices to household disposable income.

The relationship between the average price of existing dwellings and the cost of constructing new dwellings is an important determinant of how well it pays to add to the housing stock. In

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2011 the established pattern continued: greenfield construction costs were below the average price of established dwellings in regions (or groups of regions), namely:

• the ACT;

• no less than five inner Sydney regions;

• four Melbourne regions (three inner, one outer);

• Adelaide South and SA Fleurieu;

• the three Perth regions;

• Darwin; and

• two resource-based regions: WA Pilbara Kimberley and Qld Mackay.

Construction is proceeding quite strongly in most of these regions, but not in all – in many inner suburbs it is constrained by the supply of sites for redevelopment and in Melbourne Outer East by the supply of greenfield sites.

At the opposite extreme, there are many regions in which the cost of constructing new dwellings is well above the price of established dwellings. Some of these are rural regions with slow population growth, but the most notable examples are the Sydney Outer South West, Sydney Outer West and NSW Central Coast – regions notable for long, slow commuting distances which restrict the incomes which can be used to buy housing, coupled with high land values which make new houses expensive.

In the SOR reports a major determinant of housing affordability was the income which could be earned within reasonable commuting time of each dwelling, quantified by a motoring time distance of 45 minutes. Changes in catchment income therefore derive from the changes in the jobs available and their rates of pay and not from changes in the size of the catchment areas. Comparing June 2011 to June 2010 there was a general increase in catchment incomes – nearly 5% in Perth, a little under 2% in the Sydney regions, more like 1% in the SEQ regions, under 1% in the Melbourne regions and negative in Adelaide. Incomes in rural catchments tended to increase more rapidly than the incomes in the metropolitan area of their state, reflecting good seasons and (in the relevant states) the resource boom.

A simple measure of housing affordability is the ratio of average dwelling price to household disposable income for a region. In 2011 the highest ratio was 7.8 in Inner Eastern Melbourne (the average house is priced at nearly eight times average annual household earnings). Other high ratios are found in other parts of inner Melbourne and inner Sydney, with lower ratios on the metropolitan fringes and even lower ratios in the country – right down to 1.8 times in SA East. However, these simple ratios are misleading in that many residents own their homes outright, having bought at past prices – in Sydney, many a pensioner lives in a million-plus house. As outlined in the 2010-11 report, a more useful measure of housing affordability to households entering the market is the ratio of a mortgage on a new house to the income available within commuting distance from that house, including allowance for the number of people competing for that income. Judging by this measure, new houses are particularly expensive in two groups of regions:

• Outer Sydney including NSW Central Coast (ratios from 51% to 61%); and

• two lifestyle regions – SEQ Gold Coast and SEQ Sunshine Coast (ratios of 63%).

The important implication is distance from the jobs of metropolitan Sydney. The SEQ examples more likely derive from demand bankrolled from outside the region – possibly retirees, but if retirees harvesting and re-investing Australian capital gains by selling out of Sydney and Melbourne were important there should also be high mortgage to catchment income ratios in the other lifestyle regions. This is to some extent the case – for example,

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43% in NSW South Coast – but does not account for the whole of the high price. Overseas demand is also a factor.

Outside these high-price zones the affordability ratio lies in the 40% to 50% range in the rest of the metropolitan areas and hovers around 35% in the non-metropolitan regions. Reflecting the efficient land administration in the ACT, the ratio there is 29%, not far from the lowest in the country (two WA country regions are lower, but in this reflects a combination of resources boom incomes with low land prices).

The above summary allows the results presented in Tables 2.7 to 2.19 to be placed in the national context. The important implication from the tables in the context of this report is the fact that the Gold Coast and Sunshine Coast has severe dwelling affordability problems in terms of the potential for new households to migrate to the area and have to support new dwelling construction from household income sourced from employment within the region. The analysis explains why these two regions will not return to the rapid construction growth rates experienced over the 2000 to 2006 period. Housing shortages will drive a recovery in dwelling investment in these regions together with the inflow of migrants who can finance dwelling construction significantly and household wealth. However what improvement in dwelling construction investment occurs in this region over the next few years it will be subdued and well below the potential growth rates given in the developing housing shortages for Queensland for Queensland in general and the Gold Coast and Sunshine Coast in particular.

To a large extent dwelling construction growth in the Gold Coast and Sunshine Coast over the projection period will we driven by new migrants from elsewhere in Queensland, elsewhere in Australia, or the world to the regions bringing in equity capital. Many existing residents of these regions will have to relocate to other reasons in Queensland or Australia in order to gain the income from work necessary to support the mortgage required for new dwelling construction.

There is no housing affordability issue from the tables for the resource regions and housing affordability in the Brisbane region is adequate. All this points to a recovery in housing investment, as is predicted in this report, but at growth rates which on a sustained basis will be below historical benchmarks.

Table 2.7 Housing – Brisbane City

Housing indicator 1991.3 1997.3 2001.3 2006.3 2008.2 2010.2 2012.2

Annual growth

1997-12

Average value of dwellings ($cvm '000s) 194.1 210.3 249.4 414.2 492.6 496.2 468.8 5.6%Average dwelling prices to household disposable income (%) n/a 2.5 2.8 3.9 4.5 4.2 3.8 2.9%Mortgage burden on average dwelling purchase (%) n/a 20.2 22.3 30.9 35.7 33.3 30.7 2.9%Greenfield construction costs to average dwelling price (%) 2.1 1.8 1.7 1.2 1.0 1.0 1.1 -3.4%Catchment dwelling purchase income support ($cvm) 57499 63291 71574 88064 94869 93004 120132 4.4%Dwelling affordability - average mortgage on existing dwelling to catchment income support (%) n/a 26.5 27.8 37.5 41.4 42.6 31.1 1.1%Dwelling affordability - average mortgage on new dwelling to catchment income support (%) n/a 48.3 46.0 45.6 42.6 44.6 34.1 -2.3%Community services available in catchment - hours/capita 153.7 180.2 192.3 189.2 199.6 213.8 220.1 1.4%Adult population per dwelling 2.3 2.2 2.2 2.2 2.3 2.3 2.3 0.5%

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Table 2.8 Housing – Gold Coast


Annual growth

1997-12

Average value of dwellings ($cvm '000s) 212.7 238.8 266.2 460.8 514.6 483.8 437.8 4.2%Average dwelling prices to household disposable income (%) n/a 3.5 3.6 5.4 6.0 5.1 4.4 1.5%Mortgage burden on average dwelling purchase (%) n/a 28.3 29.1 42.8 48.0 41.1 35.4 1.5%Greenfield construction costs to average dwelling price (%) 1.9 1.6 1.6 1.1 1.0 1.1 1.2 -2.1%Catchment dwelling purchase income support ($cvm) 47787 50015 54054 62648 66196 64894 63336 1.6%Dwelling affordability - average mortgage on existing dwelling to catchment income support (%) n/a 38.1 39.3 58.7 62.0 59.5 55.2 2.5%Dwelling affordability - average mortgage on new dwelling to catchment income support (%) n/a 61.2 61.0 64.2 61.0 63.9 64.7 0.4%Community services available in catchment - hours/capita 109.9 134.2 137.7 140.2 145.6 147.1 115.3 -1.0%Adult population per dwelling 2.3 2.2 2.2 2.4 2.4 2.5 2.5 0.8%

Table 2.9 Housing – Sunshine Coast


Annual growth

1997-12

Average value of dwellings ($cvm '000s) 182.1 214.7 235.6 445.3 484.0 462.9 419.0 4.6%Average dwelling prices to household disposable income (%) n/a 3.2 3.4 5.7 6.1 5.5 4.9 2.9%Mortgage burden on average dwelling purchase (%) n/a 25.7 26.8 45.3 48.6 44.3 39.2 2.9%Greenfield construction costs to average dwelling price (%) 2.2 1.8 1.8 1.1 1.0 1.1 1.2 -2.5%Catchment dwelling purchase income support ($cvm) 48302 50291 54395 63383 67039 65582 61637 1.4%Dwelling affordability - average mortgage on existing dwelling to catchment income support (%) n/a 34.1 34.6 56.1 57.6 56.3 54.3 3.2%Dwelling affordability - average mortgage on new dwelling to catchment income support (%) n/a 60.8 60.6 63.4 60.3 63.3 66.5 0.6%Community services available in catchment - hours/capita 109.2 132.1 138.5 140.2 146.1 148.2 136.3 0.2%Adult population per dwelling 2.2 2.1 2.1 2.3 2.3 2.3 2.3 0.5%

Table 2.10 Housing – West Moreton


Annual growth

1997-12


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Table 2.11 Housing – Wide Bay-Burnett


Annual growth

1997-12


Table 2.12 Housing – Darling Downs South West


Annual growth

1997-12

Average value of dwellings ($cvm '000s) 121.6 132.5 130.1 240.5 255.3 269.6 264.4 4.8%Average dwelling prices to household disposable income (%) n/a 1.7 1.4 2.6 2.7 2.8 2.5 2.8%Mortgage burden on average dwelling purchase (%) n/a 13.3 11.1 20.7 21.3 22.2 20.0 2.8%Greenfield construction costs to average dwelling price (%) 2.2 2.0 2.1 1.4 1.3 1.3 1.3 -2.7%Catchment dwelling purchase income support ($cvm) 51439 56891 62228 70553 74665 73463 67340 1.1%Dwelling affordability - average mortgage on existing dwelling to catchment income support (%) n/a 18.6 16.7 27.2 27.3 29.3 31.3 3.6%Dwelling affordability - average mortgage on new dwelling to catchment income support (%) n/a 36.3 35.7 38.5 36.5 38.1 41.1 0.8%Community services available in catchment - hours/capita 121.7 140.4 145.3 146.0 153.2 158.1 62.3 -5.4%Adult population per dwelling 2.3 2.1 2.2 2.2 2.2 2.3 2.3 0.3%

Table 2.13 Housing – Fitzroy Central West


Annual growth

1997-12


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Table 2.14 Housing – Mackay


Annual growth

1997-12

Average value of dwellings ($cvm '000s) 126.5 161.4 153.2 369.1 397.1 387.7 382.6 6.0%Average dwelling prices to household disposable income (%) n/a 1.8 1.6 3.2 3.4 3.1 2.7 3.0%Mortgage burden on average dwelling purchase (%) n/a 14.2 12.5 25.7 27.2 24.9 21.8 3.0%Greenfield construction costs to average dwelling price (%) 2.2 1.6 1.8 0.9 0.9 0.9 0.9 -3.8%Catchment dwelling purchase income support ($cvm) 54115 59903 64505 77034 81423 80913 97101 3.3%Dwelling affordability - average mortgage on existing dwelling to catchment income support (%) n/a 21.5 19.0 38.2 38.9 38.2 31.5 2.6%Dwelling affordability - average mortgage on new dwelling to catchment income support (%) n/a 34.5 34.5 35.2 33.5 34.6 28.5 -1.3%Community services available in catchment - hours/capita 116.2 133.6 139.3 135.5 137.0 141.2 56.5 -5.7%Adult population per dwelling 2.3 2.3 2.2 2.4 2.5 2.5 2.5 0.8%

Table 2.15 Housing – Far North


Annual growth

1997-12


Table 2.16 Housing – North West


Annual growth

1997-12

Average value of dwellings ($cvm '000s) 125.5 158.2 155.0 267.1 347.3 330.7 313.2 4.7%Average dwelling prices to household disposable income (%) n/a 1.8 1.8 2.6 3.4 2.9 2.6 2.4%Mortgage burden on average dwelling purchase (%) n/a 14.6 14.1 20.7 27.3 22.8 20.7 2.4%Greenfield construction costs to average dwelling price (%) 2.2 1.6 1.8 1.3 1.0 1.1 1.1 -2.6%Catchment dwelling purchase income support ($cvm) 52968 58825 62024 72934 77247 76234 104059 3.9%Dwelling affordability - average mortgage on existing dwelling to catchment income support (%) n/a 21.5 19.9 29.2 35.9 34.6 24.0 0.8%Dwelling affordability - average mortgage on new dwelling to catchment income support (%) n/a 35.1 35.9 37.2 35.3 36.7 26.6 -1.9%Community services available in catchment - hours/capita 124.9 143.9 146.5 148.1 145.5 143.2 253.7 3.9%Adult population per dwelling 2.4 2.3 2.3 2.3 2.4 2.4 2.5 0.6%

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3. Queensland construction activity in the Australian context

3.1 Queensland construction: The headline outcomes

The headline outcomes for total Queensland construction, from Table 3.2(c), are the following.

(i) In 2010-11 and 2012-12 Queensland construction activity (or total work done across the dwelling, non-residential building and engineering segments) is estimated to have grown by 5.3% and 16.4% respectively.

(ii) The projected growth rate for 2012-13 is 5.8%. However, engineering construction explains the entire growth rate. There will be a $769m decline in non-residential building construction, which will be more than offset by the $3,844m in engineering expenditures. This follows on from the $9,059m increase in 2011-12.

(iii) In 2013-14 total Queensland construction is projected to decline by 1.3% with engineering making a -$2,461m due mainly to the completion of non resource projects. Dwelling expenditures are projected to recover with positive $2,138m contribution to construction demand while non-residential building construction will decline by $424m.

(iv) The LNG expansion peaks in 2014, which means that as expenditure winds down engineering will make a negative contribution to growth over the 2015 to 2017 years. The net negative average annual contribution from engineering is relatively modest, averaging -$2,800m percentage points, due to the expansion of investments in coal and metal ore mining, etc. The peak annual expenditure on LNG investment will be close to $15 billion.

Over the 2015-2018 period there is a significant positive contribution of dwelling construction expenditures to growth, with the average increase in expenditure averaging $1490m for the period. This means that dwelling investment expenditures will contribute 2.7% per annum to the growth in Queensland construction activity. As the overall Queensland construction sector growth rate averages -0.9% per annum for the period it indicates that the wind down in LNG investment is largely offset by the recovery in housing.

The recovery in non-residential building expenditures is subdued with the average annual increase over the 2015 to 2018 period being $153 million. It therefore makes a negligible contribution to the overall Queensland construction sector growth rates.

(v) Over the 2019 to 2022 period, dwelling expenditures contribute an average annual minus $190m to the growth in construction demand and therefore a small negative contribution to the overall Queensland construction sector growth rate. Similar small contributions either positive or negative are contributed from engineering and non-residential building expenditures. It is not surprising therefore that the annual average growth rate in Queensland total construction expenditures over the 2019 to 2022 period averages 0.5% per annum. A major negative contribution comes in the last year of the projection period.

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3.2 Total construction: A comparison with last year’s Annual Report

If the projections of the 2011 annual report are adjusted to the price base of this year's report a comparison of the projections can be made. The 2011 12 the expected level of activity in total Queensland construction was underestimated by 3.7% compared to the likely outcome. This was mainly due to a slower ramp up in LNG investment expenditures than what in fact has been the case. By 2014 the same level of projected activity for Queensland construction was forecast in last year's report as is in this year's report. That is a total of $55.6 billion. Further out there is a greater divergence in the projections. By 2017 last year's projected activity to total Queensland construction was 1.7% above this year's projection. By 2021 the divergences increases to 5.4%.

One reason is a downgrading of the prospects for the Queensland resource sector due to the expected lower growth in demand from China and elsewhere due to firstly a lower growth outlook and secondly new market developments around Shale gas. The other main reason for the downgrade is more weight is now being given to regional housing affordability issues in terms of constraining both the growth in the housing stock and therefore the population. Whether or not there should have been a greater downgrade only time will tell but is certainly an issue that should be at the core of any debate over the future of the Queensland construction industry. All this report can do, as it has, is provide the indicators so that debate maybe an informed debate.

3.3 The Queensland dwelling market

For the 2010-11 fiscal year total new construction in private dwelling fell by 17%. It is estimated that the fall in private new dwelling construction for 2011-12 will be of the order of 5.3%. In the March quarter 2012 the level of Queensland private new dwelling construction was 38% below the previous peak of the September quarter 2008. From Figure 3.1 this is not surprising, given that the average quarterly real dwelling approvals for the 2010-11 fiscal year was 40% below the average quarterly levels prevailing over the December 2007 quarter to September quarter of 2008. In the March quarter 2012 the level of approvals was half the peak level of approvals for the December quarter 2007.

The current low level of approvals is unlikely to result in any significant improvement in new dwelling construction in Queensland for the 2013 fiscal year. New construction activity is projected to fall by 1%.

There is rapidly improving economic conditions in Queensland. However there will be a delay in the recovery in dwelling expenditures. There has been the withdrawal of some Queensland government's housing assistance measures. The reality is that the Queensland economy has been subject to severe shocks and it will take some while for confidence to recover irrespective of the movement of short-term economic indicators. The Queensland economy relative to the other Australian states was severely affected by the GFC and the natural disasters of early 2011 would not also have helped in adversely affected expectations in relation to the operation of housing markets. These expectations have highlighted risks around house values which would be constraining the construction decision. Finally the uncertainty surrounding the world economy and the future outlook for employment, incomes and mortgage costs would be an obstacle to a sustainable recovery in the Queensland dwelling construction sector.

There are severe regional constraints in housing affordability in the Gold and Sunshine Coasts. However housing markets elsewhere are more in balance in terms of affordability. Population is growing along with the housing shortage.

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The number of dwelling approvals is expected to increase from the current quarterly level of 7,000 to 8,000 over the second half of 2013. A further similar increase is projected over the following year.

3.3.1 New dwelling construction post 2013

From 2013 the prediction is for Queensland’s private new dwelling construction to sustain a high growth rate until the end of the projection period. Over the period 2013-14 to 2017-18, the average annual growth rate is just under 14%. A sharp recovery is projected for 2014. Over the three years to 2019 to 2022, activity stabilises at $14.7 billion or 75% above 2011 levels and 26% above 2007-2008 levels. It is not until 2017 that new dwelling construction passes the 2008 peak.

At first glance the growth rates may appear over optimistic. However, once put in perspective the outcome appears more realistic. It can be seen, from Table A.6, it is not until 2017 that private new construction expenditure is significantly above its 2007-08 previous peak. Therefore, the high growth rates of the 2014 to 2018 are the of growth rates required if housing shortages are to be constrained from rising returning the dwelling stock to a level associated with low housing shortages.

This can be seen from Figure 3.8. Up until 2009 the estimated Queensland housing shortage was low. If the GFC had not occurred, then over the last three years new dwelling construction would have remained close to 2007-08 peak levels, if a little below, and the housing shortage by 2012 would have been negligible. As it is, because of the sluggish growth in the Queensland economy and the associated low levels of Queensland construction over the past two years, the housing shortage for 2012 is estimated at 48,000 dwellings. Despite the projected sharp increase in dwelling construction activity over 2014 through to 2016 it can be seen from the figure that by 2017 the total housing shortage is estimated to reach 87,000.

Unless Queensland new dwelling construction activity recovers within the short-term future and given a reasonable expectation of sustained employment growth and relatively low interest rate regime stemming from the weakness in the National economy then the only conclusion is that the structural problems in the Queensland housing market and the ability of the economy generally to generate employment with sufficient income to support mortgages for new construction is going to deteriorate to a much greater extent than what is reflected in the regional tables of indicators to housing affordability. This may indeed prove to be the case. However for the time being the assumption is that the return of reasonable growth to the Queensland economy will have a large impact on the willingness of Queensland households to undertake new construction activity. It can only be hoped this proves to be the case because the alternative issues that arise will be complex and by no means easy to solve.

The situation will have to be monitored. Despite the favourable headline fundamentals if there is no significant improvement in Queensland new dwelling construction activity over the next 2 to 3 years then they housing shortages will reach above 100,000 by 2016 or 2017. The implications of this are likely to be severe both for the economy and the stability of the social fabric.

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3.3.2 Other renovations expenditure

Along with the general Queensland economy, other renovations expenditures (or other value of work done) have stagnated. This is to be expected because drivers of other renovations expenditures reflect confidence in the future, with the bottom line being the degree of capital gain on established home sales. In 2010-11, despite flood damage expenditures, renovations expenditures fell by 7.2%.

Flood damage repairs would still have been an important driver over 2011-12. Even so, the increase in activity has been a modest 4.4%. For 2012-13 and 2013-14 the increase in expenditures is projected at 1.6% and 3% respectively.

From Table A.16 for Queensland the level of renovations expenditures (that is for other work done) increases only relatively slowly post 2014. The average annual growth rate for the 2015 to 2022 period is 1.1% per annum. Renovations expenditures are particularly sensitive to the willingness of households to undertake additional debt. Over the next few years Queensland households will be constrained in doing this. Therefore the growth of renovations expenditures is likely to be subdued which is reflected in the projections.

3.3.3 Total Queensland private dwelling construction expenditures

Total Queensland dwelling construction expenditures growth is the sum of new construction, including alterations and additions, and renovation expenditures. In 2011-12 it is estimated that total Queensland private dwelling construction expenditures will fall 1.4%, following on from the 13%fall in 2010-11 and 5% fall in 2009-10. In 2012-13 growth is projected at 0.1%, followed by a 15.4% increase in 2013-14. Over the 2015 to 2022 period the average annual growth rate in private dwelling investment expenditures is projected at 3.7% in line with the States GSP growth rate and the growth in household disposable income.

Figure 3.1: Queensland dwelling – new construction approvals

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Figure 3.2: Queensland dwelling – new construction approvals

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Figure 3.4: Real Queensland established house prices

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Figure 3.6: Queensland housing approvals – number and CVM $m

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3.4 Non-residential building

The short-term outlook for both public and private non-residential building is not optimistic. The former, due to the ending of the fiscal stimulus, and the policy settings of debt consolidation by the Queensland Government, and the latter due to the:

(i) stagnant Queensland economy;

(ii) crowding out effects of the mining boom;

(iii) stringent finance sector lending criteria and a greater perception of risks as a result of experiences during the GFC; and

(iv) structural change away from buildings in the production process particularly in retailing.

3.4.1 Private non-residential building

In 2010-11 private non-residential building expenditure rose 0.7%, followed by an 8.4% increase in 2011-12. In 2012-13, non-residential construction expenditure is projected to fall by 2.9%. In 2013-14, non-residential building is projected to fall by 6% followed by another fall of 8% in 2014-15.

Figure 3.7 shows the correlation between the value of private non-residential work done and private non-residential approvals. The figure indicates a very sharp downturn in private non-residential building construction activity over the next couple of years. The projections are therefore optimistic in this context they are based on the model benchmarks that underlying private non-residential construction activity is around $600 million to $700 million. This benchmark together with commencements in a number of identified small to medium projects and the ICON Ipswich project are the drivers for the short term projection outlook.

40

If the $600 million to $700 million represents a higher benchmark for replacement demand than what is actually the case and/or replacement demands are being postponed for the reasons outlined above then the falls in non-residential private building investment over the next two years could easily run into double-digit negative growth rates. The next two quarters will indicate whether or not this is the case.

Certainly, as projected, significant declines in activity over the short term is to be expected. The rationale for this is not simply the current level of approvals but also because there are few major projects that are under consideration or committed that could significantly increase private sector approvals other than the above-mentioned Ipswich project. This can be seen from Figure 3.11. The value of projects under consideration over the last year has maintained lows, not seen, since the end of the last century.

This expectation is consistent with the immediate past stagnant Queensland economy. Little growth over these years has created excess capacity across offices, shops and factories. While the mining boom and the associated high exchange rate has discouraged domestic and international tourism, and has created excess capacity in the accommodation sector, or at least reduced the share of that capacity achieving profitable margins.

Nevertheless if a growth profile for the Queensland economy adopted for this report is realised then a number of the current constraints to expansion will gradually be eliminated. By 2016 it is projected that non-residential private building construction activity will increase by 20% followed by further single digit increases to 2020. Even allowing for Internet shopping and internet based work lowering the long run growth in underlying demand the profile represents the minimum that would be expected given the growth outlook.

A back of the envelope plausibility check on the projections is possible. From Figure 3.21 over the 1992 to 2008 period the average annual growth rate of Queensland GSP was 4.8% per annum while the share of private non-residential building expenditures in GSP averaged 2% per annum. Over the period 2012 to 2020 the average annual growth rate of Queensland GSP is 3.9% per annum implying a 1.6 percentage share of non-residential private building expenditures in Queensland GSP given the historical rule of thumb. The actual projected expenditure share is 1.5%.

Overall, the outlook for private non-residential building construction is one of falling activity at relatively low levels over the next three to four years, followed by a sharp up-lift in activity which is sustained until the end of the current decade.

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Figure 3.7: Queensland – Private non-residential building work done and private non-residential building approvals

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Figure 3.8: Excess demand for dwellings – Queensland

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3.4.2 Public non-residential building activity

The outlook for public non-residential building activity over the short term is more pessimistic than the case for the corresponding private sector.

As a major component of the stimulus policy response via expenditures in education infrastructure in particular, public non-residential construction expenditures rose rapidly in 2008-09. The growth rate was 57%, followed by a 102% increase over 2009-10. In 2010-11 the expected increase was 9%. The ending of the stimulus over 2011 resulted in a fall of public non-residential building activity of 37% in 2011-12 and 28.5% further fall in 2012-13 is projected. In 2013-14 the level of public non-residential building activity is projected to fall by a further 10% despite the commencement of a major hospital project. On a trend basis the level of public non-residential building construction activity by 2016 is consistent with the levels prevailing before 2009 after a further fall of 12%in 2014-15 is taken into account. After 2016 the profile for public non-residential building construction activity is flat with average levels near the 2016 projected outcome.

Public sector debt consolidation is only one of the factors that would explain the outlook for public non-residential building expenditures will stop and other is the fact that the stimulus expenditures to some extent represented a pull forward of projects from the 2012 to 2020 period. That is projects that would have been constructed at a later date and therefore reducing the need for expenditures in the years of the projection period.

Figure 3.9: Queensland share of national population increase and national approvals (%)

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Queensland share of national approvals

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3.4.3 Major Queensland non-residential building projects

The major non-residential project that has moved to the construction phase since the last report is the rebuilding of the Coles store in Ipswich. This project is estimated to cost $25 million. Major projects currently under construction are the $1.8 billion construction of a new 750-bed Gold Coast University Hospital at Parklands, the $1.4 billion construction of the new 359 public-bed Queensland Children's Hospital, and the $1 billion construction of ICON Ipswich in Ipswich CBD.

In real terms over the last six months the value of non-residential building projects under construction or committed have risen by 1.4% or $36 million, projects under consideration have risen by 38.8% or $183 million.

Since the last report the value of non-residential projects listed as completed was $3.3 billion, including the $1.1 billion construction of new schools in south east Queensland. There was $463 million of new projects under construction, giving a net decrease of $2.7 billion.

The major non-residential projects completed since the last report are the $1.1 billion construction of seven new schools in south east Queensland, the $880 million construction of the 70-storey Trilogy Tower in Brisbane and the $800 million stage two development of the Riverside Centre in Brisbane.

Figure 3.10: Queensland non-residential building approvals and work done

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Figure 3.11: Queensland non-residential projects under construction, committed and under consideration

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3.4.4 Total non-residential building activity

The total non-residential building activity is the sum of the private and public sector activity. Since 2003-04 non-residential building activity has grown continuously and, generally, strongly. In 2009-10 the annual growth in total non-residential building expenditures was 2.3% followed by a further growth of 4.3% in 2010-11. These relatively modest growth rates reflect the fact that the impact of the fiscal stimulus was only marginally positive after allowing for the falls in private non-residential building construction expenditures’

However 2011-12 represented the first decline since 2003 in total non-residential building construction expenditures with an estimated fall of 12.7% which is projected to be followed by another fall of 11.4% in 2012-13. A further decline projected in 2013-14 of 7.1%.

Over the 2014-15 to 2021-22 period the projected average annual growth rate is projected to be 3% per annum. The driver of growth over this period, as noted above, will be private non-residential building construction expenditures.

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3.5 Engineering construction

The determination between the private and public sector engineering construction is by no means as clear cut as the case for non-residential building activity. Privatisation of enterprises and the use of private public partnerships (PPPs) can radically change the profiles for activity in each segment. In the case of engineering, therefore, it is more useful to discuss the sector as a whole and then discuss the likely share of activity for the public sector.

3.5.1 Engineering: the general profile to 2022

The growth in engineering construction expenditures are summarised in Table 3.4. The table gives the percentage point contribution of each of the major engineering segments, that is; roads, water storage, heavy industry etc. to total engineering construction growth. The historical and future importance of the heavy industry sector (predominantly driven by mining investment) to overall Queensland total engineering construction activity is self-evident from the table. In 2006 when total Queensland engineering construction expenditure grew by 28.6% the heavy industry sector contributed 60% of this growth or 16.8 percentage points. In 2011 when the growth rate of Queensland engineering construction expenditure is was 20.3% the heavy industry sector contributed 16.9 percentage points to this growth or 83% of the growth. In the 2012 fiscal year heavy industry will explain almost all the total Queensland engineering construction growth. The total growth rate in Queensland total engineering construction in 2012 is estimated at 38.5% with heavy industry contributing 35.9 percentage points or explaining 93% of the total engineering construction activity growth rate. In 2013 the growth drivers become more balanced. The overall total engineering growth rate is projected at 11.8% with heavy industry explaining half this growth rate with the remainder coming from contribution from roads, rail and harbours and electricity generation.

In 2014 the turn down in non-LNG mining investment heavy industries abstract 7.7 percentage points from total Queensland engineering construction expenditures which is very close to the projected total decline in activity. In 2015 with the downwards phase in LNG investment commencing heavy industry investment subtracts 13.9% of total Queensland engineering construction expenditure growth rates with the overall decline in total engineering expenditure being 10.3%. The downward trend in the level of heavy industry construction activity continues for the period 2016 to 2019 with the average annual contribution to total Queensland construction expenditure growth being -4.3%. This is almost identical to the total average annual decline in the total engineering construction growth rate. During this period the major other contributions to Queensland total engineering construction activity comes from rail and electricity generation investment.

Over the last three years of the projection period the average annual growth rate in total Queensland engineering construction activity is a modest 1.5% per annum with a major negative contribution coming from the downturn in heavy industry, in the last year of the projection period.

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3.5.2 Queensland mining investment and activity

From Figure 3.14, Queensland mining investment is projected to accelerate sharply. The average Queensland mining investment for the years 2006 to 2010 was $5.7 billion. Over the years 2012 to 2014, the projected average is 4.4 times the immediate past average, at $25.4 billion. Over the 2015 to 2018 period the average level of investment is stable at $18.7 billion. Over the last four years of the projection period the average will projected be $13.8 billion.

With three large scale LNG plants now committed or under construction, the contribution of LNG investment to the total mining investment will be $8 billion per annum for the years 2012 to 2016 or 43% of the total.

Given the investment profiles the Figure 3.12 it is not surprising that the dominant driver of Queensland mining production growth between 2011 and 2021 will be coal and gas production. The cumulative increase by 2021 will be 131%. By 2021 coal production is projected to increase by 125 million tonnes compared to the 2011 production of 179 million tonnes.

Metallic mineral production will also make a significant contribution to growth in the Queensland mining industry. The projected output increase between 2011 and 2021 is 100%. That is the industry will double in terms of production. In terms of production growth Metallic minerals will also make a significant contribution to the growth.

Between 2011 and 2021 the drivers of metallic mineral production expansion in Queensland will be, due to expansions in uranium production (2,276 tonnes), gold (38.9 tonnes) and nickel (85400 tonnes by 2019).

It is apparent, from Figure 3.15, that after 2016 no further major LNG plant is assumed, reflecting uncertainty of the growth outlook and the fact that the world in general, and China in particular, are now focussing on domestic non-conventional gas resources plus the possible lack of gas resources in Eastern Australia.

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Figure 3.12: Queensland mining, LNG and metal ore investment

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Figure 3.14: Queensland mining investment (2010 $m)

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3.5.3 Major Queensland engineering projects

The new major construction projects that commenced since the last report were the $4.2 billion Caval Ridge Project, a new coal mine in the Bowen Basin, the $1.6 billion Daunia coal mine, south west of Mackay and the $879 million Broadmeadow coal mine extension project, south west of Mackay.

In real terms, over the last six months the value of engineering projects under construction or committed have risen by 14.3% or $1,660 million and projects under consideration have declined by 15.2% or $1,157 million.

Since the last report the value of engineering projects listed as completed was $4.9 billion and the value of new projects under construction or committed was $1.9 billion, giving a net decrease of $3 billion.

The major engineering projects that have been completed since the last report are the $2 billion Cunningham Arterial (Ipswich Motorway) and the $2 billion stage two of the Yarwun Alumina refinery at Gladstone.

Figure 3.16: Queensland engineering – work done

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3.5.4 Other engineering segments

In the absence of further environmental shocks with the completion of the catch-up phase, the growth in other segments should be reasonably stable, except when major projects are introduced. For example, the commencement of the Brisbane rail network extension in 2018.

The dominance of mining investments (the dominant part of heavy industry expenditure) in driving Queensland construction expenditure can be seen from Table 3.4. Over the years 2012 to 2018, the growth in mining investment will contribute over 50% to the overall Queensland engineering construction expenditure growth rate.

3.5.5 Private and public engineering expenditure

Figure 3.19 shows the share of public engineering expenditures in total engineering expenditure. In general, the higher the share of heavy industry expenditure in total engineering expenditure the lower will be the public share. Also, the low public sector share over the 2008 to 2011 period is, in part, due to large scale road projects being undertaken as PPPs.

The outlook is one where despite sustained high levels of heavy industry expenditures to 2015, the public sector share is projected to decline from its 20% share in 2011 to a trough of 14% in 2013. With the wind back in the contribution of heavy industry to total Queensland construction activity after 2014 the share of public engineering expenditure in the engineering total will increase rapidly to 22.3% in 2016 and by 2022 constituting a third of total engineering expenditures.

3.6 Queensland’s construction share of total Australian construction

In 2010-11, Queensland’s construction share of total Australian construction fell to 24.2%, similar to the previous year and 2 percentage points from the peak share of 26.1% in 2007-08. The major reason for the decline was a 6.4 percentage point decline in dwelling construction expenditure’s share of the national total from 27.1% in 2007-08 to 20.6% in 2010-11.

A strong recovery in the national share occurred in 2011-12, with the share reaching 26.1%, with the reasons being that Queensland’s total engineering construction expenditure share of the national total engineering construction expenditure increases by 2.6 percentage points to 30.4%.

For the remainder of the projection period the Queensland share of total construction oscillates between 24% and 26%. After 2014 the Queensland share of total residential construction activity increases from 20.7% in 2013 to a peak of 26.2% by 2017. The average for the remaining years of the projection period is 25%

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Figure 3.19: Share of public engineering in total engineering (%)

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Figure 3.21: Queensland non-residential construction and private non-residential building expenditure share

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Table 3.1(a) Australia and Queensland construction industry activity – value of work done (the National Institute of Economic and Industry Research's June 2012 forecasts) (constant prices chain volume measure – 2009-10)

Fiscal years 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

AUSTRALIA (2007 $m) Total Residential Building 68220 69057 67724 70182 70695 67838 67603 71201 73090 75257 79486 85068 85098 87485 94353 85025 Total Non-Residential Building 28892 31561 32276 34901 34148 29817 27073 27058 27743 31071 32208 31007 30754 31377 32194 31046 Total Engineering Construction 56994 63206 74977 76408 84891 107141 122298 121465 121443 109548 99487 100258 106821 105420 102769 98201 Total Australian construction activity 154106 163824 174977 181491 189734 204796 216974 219724 222275 215875 211181 216333 222673 224282 229317 214272 QUEENSLAND (2007 $m) Total Residential Building 18835 18727 17162 16545 14556 14011 14022 16160 17642 19201 20832 22120 21404 21827 22786 21359 Total Non-Residential Building 6445 6643 7235 7399 7719 6736 5968 5544 5043 5882 6199 6157 6562 6950 7085 6885 Total Engineering Construction 14181 17333 20626 19578 23561 32621 36464 34004 30494 27683 25487 25489 25350 26279 27528 26459 Total Queensland construction activity 39461 42703 45023 43522 45837 53367 56454 55707 53179 52765 52519 53766 53316 55057 57399 54703 QUEENSLAND (% OF AUSTRALIAN TOTALS) Total Residential Building 27.6 27.1 25.3 23.6 20.6 20.7 20.7 22.7 24.1 25.5 26.2 26.0 25.2 24.9 24.1 25.1 Total Non-Residential Building 22.3 21.0 22.4 21.2 22.6 22.6 22.0 20.5 18.2 18.9 19.2 19.9 21.3 22.2 22.0 22.2 Total Engineering Construction 24.9 27.4 27.5 25.6 27.8 30.4 29.8 28.0 25.1 25.3 25.6 25.4 23.7 24.9 26.8 26.9 Total Queensland construction activity 25.6 26.1 25.7 24.0 24.2 26.1 26.0 25.4 23.9 24.4 24.9 24.9 23.9 24.5 25.0 25.5 QUEENSLAND (ANNUAL GROWTH LESS REST OF AUSTRALIA GROWTH) – % per annum Total Residential Building 10.6 -2.5 -8.8 -9.7 -16.7 0.4 0.5 12.5 8.4 7.7 3.9 -1.1 -4.4 -1.1 -4.6 4.8 Total Non-Residential Building 10.0 -7.9 8.4 -7.6 8.2 -0.1 -2.9 -9.0 -14.5 5.7 2.1 3.8 9.2 4.9 -0.8 1.0 Total Engineering Construction 15.5 15.1 0.5 -9.6 12.4 16.9 -3.4 -8.6 -14.3 0.8 1.7 -1.0 -9.5 6.5 9.7 0.8 Total Queensland construction activity 11.6 2.6 -1.9 -9.5 1.0 11.2 -0.2 -3.5 -7.6 2.8 2.3 -0.1 -5.0 3.3 2.7 2.5 QUEENSLAND (% OF QUEENSLAND TOTAL) Total Residential Building 47.7 43.9 38.1 38.0 31.8 26.3 24.8 29.0 33.2 36.4 39.7 41.1 40.1 39.6 39.7 39.0 Total Non-Residential Building 16.3 15.6 16.1 17.0 16.8 12.6 10.6 10.0 9.5 11.1 11.8 11.5 12.3 12.6 12.3 12.6 Total Engineering Construction 35.9 40.6 45.8 45.0 51.4 61.1 64.6 61.0 57.3 52.5 48.5 47.4 47.5 47.7 48.0 48.4 Total Queensland construction activity 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

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Table 3.1(b) Australian construction industry activity – value of work done (the National Institute of Economic and Industry Research's June 2012 forecasts) (constant prices chain volume measure – 2009-10 $M)

Fiscal years 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 PRIVATE RESIDENTIAL BUILDING New Work 37157 37271 37160 37002 37092 35194 33633 34872 35124 36391 39816 44502 44738 46824 52757 44800 Alterations and Additions 7136 7286 7010 6878 7201 7021 6280 6302 6475 6608 6805 7108 7266 7539 7984 7231 Other Work Done 23164 23620 22737 24107 23515 23424 26125 28261 29636 30503 31236 31860 31352 31251 31884 31173 Total Private Residential Building 67457 68177 66907 67987 67808 65639 66039 69435 71236 73503 77857 83471 83356 85613 92625 83204 Total Public Residential Building 762 880 817 2195 2887 2199 1564 1766 1854 1754 1629 1597 1742 1872 1728 1821 Total Residential Building 68220 69057 67724 70182 70695 67838 67603 71201 73090 75257 79486 85068 85098 87485 94353 85025 NON-RESIDENTIAL BUILDING Hotels etc 1295 1356 1326 984 795 1084 1439 1838 1778 1558 1884 1740 1581 1724 1818 1682 Shops 5289 5897 5622 4337 4694 4776 4270 4811 4591 5041 4678 4600 4878 4967 5150 4815 Factories 1378 1408 1513 1050 1008 1108 1355 1582 1568 2097 2374 2536 2542 2445 2415 2508 Offices 6267 7462 7920 5265 4820 4868 4729 5678 6643 6963 6882 6449 6403 6460 6643 6437 Other Business Premises 4563 4823 4507 3423 3556 4062 3299 2723 2832 4431 5193 4602 4449 4576 4537 4542 Educational 3561 3602 3910 11711 11090 5476 3502 2314 2363 2997 3466 3428 3450 3439 3410 3439 Religious 162 151 140 160 219 207 165 163 163 165 166 166 166 166 166 166 Health 2549 2741 3054 3563 3791 4300 4689 4075 3721 3167 2483 2593 2703 2818 3097 2705 Entertain. & Recreational 1594 1889 1943 1815 1880 1845 2046 2486 2841 2955 2683 2433 2320 2417 2419 2390 Miscellaneous 2234 2232 2341 2592 2295 2090 1579 1388 1242 1696 2398 2460 2262 2366 2538 2363 Total Non-Residential Building 28892 31561 32276 34901 34148 29817 27073 27058 27743 31071 32208 31007 30754 31377 32194 31046 Total Building 97112 100618 100000 105083 104843 97655 94676 98259 100833 106328 111694 116075 115851 118862 126547 116071 ENGINEERING CONSTRUCTION Roads, highways and subdivisions 12855 12889 16001 14388 15969 16819 17438 18503 18915 18288 17221 20330 22302 21359 20226 19620 Bridges, railways and Harbours 5193 5927 6475 8055 10573 12594 14211 15536 15642 13428 12413 12324 12731 10733 10939 10392 Water storage and supply, Sewerage and drainage 3527 7550 7335 8689 9194 7265 5696 5335 5357 5333 5371 5441 5535 5622 5728 5533 Electricity generation, transmission and distribution and pipelines 9377 10011 12484 12376 12291 13017 15808 16682 16896 15881 14464 13506 15560 14631 13294 12762 Telecommunications 5305 4535 3899 3845 3844 4238 4322 3789 4810 5413 6167 4802 4890 4990 5084 4881 Heavy Industry 18222 19893 25152 24838 29306 48909 59353 57017 55290 47431 40428 40391 42216 44504 43878 41245 Recreation and Other 2515 2401 3631 4217 3714 4300 5470 4604 4533 3774 3422 3466 3587 3581 3620 3769 Total Engineering Construction 56994 63206 74977 76408 84891 107141 122298 121465 121443 109548 99487 100258 106821 105420 102769 98201 Total construction 97112 100618 100000 105083 104843 97655 94676 98259 100833 106328 111694 116075 115851 118862 126547 116071

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Table 3.2(a) Queensland construction industry activity – value of work done (the National Institute of Economic and Industry Research's June 2012 forecasts) (constant prices chain volume measure – as a % of major segment totals)

Fiscal years 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 SHARE OF TOTAL RESIDENTIAL BUILDING PRIVATE RESIDENTIAL BUILDING New Work 64.8 65.9 64.6 60.8 57.6 56.7 56.0 60.8 62.3 64.3 66.0 67.4 66.7 67.3 68.0 67.4 Other Work Done 34.3 33.2 34.4 36.9 38.9 42.2 42.8 38.3 36.8 34.9 32.9 31.7 32.3 31.6 30.9 31.4 Total Private Residential Building 99.1 99.1 99.0 97.7 96.5 98.8 98.9 99.0 99.1 99.1 99.0 99.1 99.0 98.9 98.9 98.9 Total Public Residential Building 0.9 0.9 1.0 2.3 3.5 1.2 1.1 1.0 0.9 0.9 1.0 0.9 1.0 1.1 1.1 1.1 Total Residential Building 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 NON-RESIDENTIAL BUILDING: SHARE OF NON-RESIDENTIAL BUILDING TOTAL Hotels etc 5.3 4.8 2.9 2.2 2.1 3.1 5.8 11.9 14.9 8.0 5.5 5.3 5.8 6.4 6.3 10.6 Shops 21.1 17.5 14.6 9.6 12.6 15.5 17.1 17.8 15.5 21.9 19.0 16.3 17.4 17.0 17.4 26.9 Factories 3.7 5.6 4.0 2.8 2.5 2.6 3.3 3.8 4.6 6.4 7.3 8.0 7.8 7.5 6.4 7.5 Offices 15.4 21.8 25.7 17.8 14.4 13.7 16.8 19.6 19.5 16.9 17.6 21.9 23.3 23.1 23.5 8.8 Other Business Premises 17.6 18.4 15.1 9.4 9.7 10.6 10.5 10.2 11.7 19.4 22.1 17.9 16.1 16.0 15.5 13.9 Educational 15.8 11.6 12.7 30.2 29.7 18.9 12.8 7.9 8.7 9.8 11.0 11.0 10.3 9.8 9.6 10.7 Religious 0.5 0.5 0.2 0.3 0.3 0.5 0.5 0.5 0.6 0.5 0.5 0.4 0.4 0.4 0.4 0.5 Health 8.0 7.9 8.3 10.5 13.6 21.6 22.9 16.7 12.4 6.8 6.9 7.8 7.9 7.5 7.3 7.4 Entertain. & Recreational 5.4 4.5 4.4 3.9 5.0 5.2 5.8 6.7 6.4 4.9 4.5 5.6 5.5 5.6 5.3 7.6 Miscellaneous 7.3 7.4 12.0 13.3 10.0 8.4 4.4 4.9 5.6 5.3 5.5 5.6 5.4 6.8 8.2 6.4 Total Non-Residential Building 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 ENGINEERING CONSTRUCTION: SHARE OF ENGINEERING TOTAL Roads, highways and subdivisions 24.5 22.3 28.9 28.6 21.0 16.6 13.5 16.5 22.6 22.5 21.1 21.8 21.0 19.6 18.8 28.4 Bridges, railways and Harbours 7.2 7.8 7.8 7.5 7.4 5.0 7.3 9.3 12.3 13.6 14.1 16.1 14.7 12.4 12.0 11.3 Water storage and supply, Sewerage and drainage 9.0 21.6 12.0 10.0 11.5 6.5 4.1 4.1 4.8 5.0 5.3 5.7 5.9 5.8 5.7 6.9 Electricity generation, transmission and distribution and pipelines 16.7 15.7 15.5 14.0 11.1 10.4 13.8 13.5 12.1 12.0 12.2 12.4 19.4 16.9 13.8 9.8 Telecommunications 6.9 5.0 3.1 2.9 3.1 2.2 1.9 2.0 3.2 3.9 4.3 4.6 4.7 4.7 4.6 17.2 Heavy Industry 31.0 24.5 28.8 33.5 41.9 56.2 54.9 50.5 40.8 39.3 39.2 35.6 30.5 36.9 41.4 20.1 Recreation and Other 4.7 3.2 3.9 3.6 4.0 3.1 4.6 4.2 4.2 3.7 3.7 3.8 3.8 3.8 3.7 6.3 Total Engineering Construction 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

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Table 3.2(b) Fiscal year construction activity growth rates – Queensland CVM construction activity indicators (%) Fiscal years 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Private

New work and alterations and additions 4.1 1.1 -10.1 -9.3 -16.6 -5.3 -1.0 24.9 12.0 12.2 11.5 8.4 -4.2 2.9 5.4 -7.0

Other work done 8.7 -3.8 -5.1 3.3 -7.2 4.3 1.6 3.0 4.9 3.1 2.5 2.1 -1.4 -0.1 2.2 -4.8

Total private residential building 5.7 -0.6 -8.4 -4.9 -13.0 -1.4 0.1 15.4 9.3 8.9 8.3 6.3 -3.3 1.9 4.4 -6.3

Public

Dwelling construction -23.9 0.6 -2.6 135.2 30.8 -68.0 -2.2 -0.4 0.0 6.3 27.7 -6.0 5.4 9.6 6.6 -2.3

Non-residential building

Private 11.7 9.6 0.1 -26.6 0.7 8.4 -2.9 -6.0 -8.1 20.2 9.0 5.6 6.6 4.0 0.2 -4.0

Public 42.1 -22.2 57.1 102.0 9.0 -37.3 -28.5 -10.0 -11.8 5.9 -6.6 -25.3 6.6 16.4 10.8 2.6

Total 16.8 3.1 8.9 2.3 4.3 -12.7 -11.4 -7.1 -9.0 16.6 5.4 -0.7 6.6 5.9 1.9 -2.8

Engineering

Private 32.2 36.5 25.4 -7.8 26.5 47.5 12.8 -10.6 -10.9 -13.9 -6.7 -5.7 -4.4 2.8 -1.4 -2.4

Public 1.6 -6.1 0.5 4.6 0.7 2.4 6.1 17.1 -7.7 11.9 -12.3 21.2 10.5 5.9 19.7 -6.9

Total 20.1 22.2 19.0 -5.1 20.3 38.5 11.8 -6.7 -10.3 -9.2 -7.9 0.0 -0.5 3.7 4.8 -3.9

Total construction 12.1 8.2 5.4 -3.3 5.3 16.4 5.8 -1.3 -4.5 -0.8 -0.5 2.4 -0.8 3.3 4.3 -4.7

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Table 3.2(c) Fiscal year construction activity indicator contribution to total Queensland construction growth rate (%) Fiscal years 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Private

New work and alterations and additions 1.4 0.3 -2.9 -2.3 -3.8 -1.0 -0.2 3.5 2.1 2.5 2.7 2.2 -1.2 0.8 1.4 -1.9

Other work done 1.5 -0.6 -0.7 0.4 -1.0 0.5 0.2 0.3 0.5 0.4 0.3 0.3 -0.2 0.0 0.3 -0.6

Total private residential building 2.8 -0.3 -3.7 -1.9 -4.8 -0.4 0.0 3.8 2.7 2.9 3.0 2.5 -1.4 0.8 1.7 -2.5

Public

Dwelling construction -0.1 0.0 0.0 0.5 0.3 -0.8 0.0 0.0 0.0 0.0 0.1 0.0 0.0 0.0 0.0 0.0

Non-residential building

Private 1.5 1.2 0.0 -3.3 0.1 0.8 -0.2 -0.5 -0.6 1.4 0.8 0.5 0.6 0.4 0.0 -0.4

Public 1.1 -0.7 1.4 3.7 0.7 -2.9 -1.2 -0.3 -0.3 0.1 -0.2 -0.6 0.1 0.3 0.2 0.1

Total 2.6 0.5 1.4 0.4 0.7 -2.1 -1.4 -0.8 -0.9 1.6 0.6 -0.1 0.8 0.7 0.2 -0.3

Engineering

Private 6.5 8.7 7.7 -2.8 9.1 19.5 6.7 -5.9 -5.5 -6.5 -2.7 -2.2 -1.5 0.9 -0.5 -0.8

Public 0.2 -0.7 0.0 0.5 0.1 0.2 0.5 1.5 -0.8 1.2 -1.4 2.2 1.3 0.8 2.7 -1.1

Total 6.7 8.0 7.7 -2.3 9.2 19.8 7.2 -4.4 -6.3 -5.3 -4.2 0.0 -0.3 1.7 2.3 -1.9


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Table 3.3 Annual growth and % contribution to Queensland construction activity by major construction segment

Fiscal years 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Annual percentage rate of change (%)

Dwellings 5.3 -0.6 -8.4 -3.6 -12.0 -3.7 0.1 15.2 9.2 8.8 8.5 6.2 -3.2 2.0 4.4 -6.3

Total non-residential building 16.8 3.1 8.9 2.3 4.3 -12.7 -11.4 -7.1 -9.0 16.6 5.4 -0.7 6.6 5.9 1.9 -2.8

Total engineering construction 20.1 22.2 19.0 -5.1 20.3 38.5 11.8 -6.7 -10.3 -9.2 -7.9 0.0 -0.5 3.7 4.8 -3.9


Contribution to total construction growth ($ million)

Dwellings 949 -108 -1565 -617 -1989 -545 11 2138 1482 1559 1632 1288 -716 423 959 -1427

Total non-residential building 928 198 593 164 320 -983 -769 -424 -501 838 318 -43 405 388 135 -200

Total engineering construction 2373 3153 3293 -1049 3984 9059 3844 -2461 -3510 -2811 -2196 2 -139 930 1248 -1069

Total construction 4250 3242 2320 -1502 2315 7531 3086 -746 -2529 -413 -247 1247 -450 1741 2343 -2696

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Table 3.4 Sector contribution to Queensland engineering construction growth (percentage point) Average

percentage point contribution

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2001-2012

2012-2022

Roads, highways and sub-divisions 0.9 6.4 2.7 12.2 -1.8 -3.3 2.0 -1.5 1.9 3.8 -2.1 -3.1 0.7 -0.9 -0.7 0.2 8.4 1.9 0.8

Bridges, railways and harbours -0.1 3.2 2.4 1.4 -0.6 1.4 -0.4 3.2 1.3 1.8 0.0 -0.5 2.0 -1.6 -1.8 0.2 -1.1 0.6 0.3

Water storage and supply, sewerage and drainage -1.5 4.5 17.3 -7.2 -2.6 3.8 -2.5 -2.0 -0.3 0.2 -0.2 -0.1 0.4 0.1 0.1 0.2 0.9 1.3 -0.3

Electricity generation, transmission and distribution and pipelines 7.2 0.5 2.5 2.8 -2.2 -0.6 3.3 5.0 -1.2 -2.6 -1.3 -0.7 0.2 6.9 -1.9 -2.5 -4.4 1.7 0.1

Telecommunications 2.9 -1.1 -0.7 -1.4 -0.3 0.8 -0.1 0.0 -0.1 0.9 0.4 0.0 0.3 0.1 0.1 0.1 11.9 -0.7 1.2

Heavy industry 16.8 8.0 -1.1 9.8 2.9 16.9 35.9 5.2 -7.7 -13.9 -5.2 -3.2 -3.7 -5.2 7.7 6.5 -22.1 8.3 -0.5

Recreation and other 2.5 -1.4 -0.8 1.4 -0.4 1.3 0.3 2.0 -0.6 -0.5 -0.8 -0.3 0.1 0.0 0.1 0.1 2.3 0.4 0.2

Total engineering construction 28.6 20.1 22.2 19.0 -5.1 20.3 38.5 11.8 -6.7 -10.3 -9.2 -7.9 0.0 -0.5 3.7 4.8 -3.9 13.5 1.8

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3.7 The regional dimension

The regional dimension will be considered from a top-down view across all regions and from the perspective of the growth drivers within selected regions.

3.7.1 The regional dimension – a macro view

Table 3.19 and Table 3.20 analyses the contribution of each region to total Queensland construction growth. Table 3.20 shows the strategic importance of each region in terms of a driver of Queensland construction activity.

The year by year changes are generally unstable. It is most useful to consider the role each region has played over a time span. In the relatively normal 2000 to 2005 period, the contribution of each region to total Queensland construction activity was reasonably balanced across the regions after adjusting for population size. During this period 72% of the contribution was generated in the Brisbane and Moreton regions which comprised two-thirds of the population. That is over this period the average annual growth rate in Queensland total construction expenditure was 6.3% per annum which the Brisbane region contributed to 2.3 percentage points, the Gold Coast 1.6 percentage points on the Sunshine Coast 0.9 percentage points. Bar the small regions, in terms of population size, such as the South West and Central West, most of the other regions made a contribution to construction growth proportional to their population size. During this period the contribution of the Fitzroy region to Queensland total construction growth was 0.2 percentage point.

Over the 2006 to 2012 period there was a significant change in the regional drivers of Queensland construction growth. During this period the average annual construction growth rate accelerated to 8.2% per annum with the Fitzroy region contributing 2.9 percentage points or 35% of the overall growth rate. The contribution of the Brisbane region is still significant at 2.2 percentage points although the percentage contribution from this region to the overall Queensland construction growth rate fell from one third in 2000 to 2005 to one quarter in the 2006 to 2012 period. The contribution of the Gold Coast and Sunshine Coast regions combined was 0.3 percentage points or a negligible contribution compared to its 2000 to 2005 contribution.

If from Table 3.20 the period 2013 to 2015 is analysed then the contribution of the Brisbane region becomes a -2 percentage points per annum due to the completion of major engineering and office projects and a subdued dwelling expenditure outlook. The contribution of the Gold Coast and Sunshine Coast is near zero while Wide Bay and the northern region also make negative contributions. The overall annual average growth rate Queensland construction expenditure during this period is zero with the 1.4 percentage point growth contribution from the Fitzroy region offsetting the negative falls in other regions.

With the wind back in resource development expenditures over the 2016 to 2022 period the growth contribution of individual sectors moves back towards the pattern of the 2000 to 2005 period. The contribution of the Brisbane region returns to its historical average of 2 percentage points while the contribution of the Fitzroy region is a -1.3 percentage points reinforced by a -0.4 percentage points contribution from Mackay region. The overall growth rate in Queensland construction expenditures over this period 0.4 percentage points per annum.

In terms of individual regional contributions it should be pointed out that the Mackay region in 2013 will contribute 5.6 percentage points to the Queensland total construction growth rate which is of a similar amount. However the wind back in the development of coal infrastructure over the next few years means that this contribution will turn negative.

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3.7.2 The regional construction growth dynamics

The core growth dynamics of regional growth contribution to Queensland construction growth can be traced back to the concepts of the Dutch Disease over the two-speed economy that is associated with mining booms.

During the last few years and for the next couple of years at least Australia is projected to experience a difficult time economically due to the negative consequences of the mining boom. High exchange rates, interest rates and inflationary pressures, together with uncertainty and heightened perceptions of risk associated with the continued turmoil in the world economy, will limit construction activity in regions which rely heavily on household formation and commercial non-residential building to drive construction growth.

It will only be when the pressure from the mining boom on resources subsides, the exchange rate falls and long-term expectations become more positive with some resolution of the world’s economic problems that commercial infrastructure investments will flourish. From the macro profile developed in the previous chapter, this will not be until post 2015. It will not be until after this that the Queensland regions, which rely on the population driven growth model, will be able to translate population growth into significant growth in construction activity. It will not be till after 2015 that regions which at the industry level have been particularly adversely impacted on by the crowding out impact of the mining boom, namely Northern and the Far North with their reliance on agriculture and tourism, that they will also be able to expand on a sustained basis.

3.7.3 Regional construction activity profile – Brisbane

Table 3.5 indicates that, for the Brisbane region, since the beginning of the GFC in 2008, new private dwelling construction has fallen by a cumulative total of $910m by 2011. Given another sharp fall of $340m in 2013 the cumulative fall since the GFC will approach $1.3 billion since the start of the GFC.

Over the period 2011 to 2015, from Table 2.6 the average annual growth in Brisbane's population will be 40,000 the same as the average annual increase between 2001 and 2011. This accumulating pressure on the existing housing stock plus the fact that the Brisbane region is in balance in terms of housing affordability (defined as the ability of the average household to generate income from work sufficient to support a mortgage on new dwelling construction) will combine to force a sharp increase in new construction expenditure. As a result there is a sharp recovery in new dwelling construction expenditure in 2014 which is sustained until 2019 with the average annual increase being $450 million a year.

The average contribution of new dwelling construction to Brisbane’s total construction growth rate will be just under 3% per annum between 2014 and 2019.

Over the three fiscal years 2009 and 2011, Brisbane’s private non-residential building expenditures fall by a cumulative $1.5 billion. The fall was driven by office project completions. In 2009-10 the fall in non-residential building expenditures explained two thirds of the fall in the Brisbane region’s total construction expenditure of 9.7%. Further falls in private non-residential building expenditures are over the 2013 to 2015 period. The cumulative fall over this period is $428 million. In 2016 expenditures increase by $0.4 billion, mainly from new office construction, adding 2.3% to the Brisbane region’s total construction activity growth.

The winding down of the public non-residential building stimulus takes between 3.6% and 4.0% off the Brisbane region’s total construction activity growth rate over the 2012 and 2013 fiscal years.

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The completion of road projects reduced the Brisbane region’s expenditures on private engineering by a cumulative $3.8 billion between 2010 and 2014, taking an average annual 4.3 percentage points off the Brisbane region’s total construction activity growth rate for the period. Flood damage repairs will add nearly $1 billion to Brisbane region’s public engineering expenditures over the next four years though because of project completions in other areas the net addition will be about half this. Major transport infrastructure expenditures post 2016 will ensure that engineering expenditures are an important source of growth for the Brisbane region’s total construction activity. The rail project has been assumed to commence in 2017.

Even with the new engineering projects included the average annual growth rate for Brisbane construction expenditure over the 2012 to 2022 period at 2.4% per annum is half the average annual growth rate between 2004 and 2011. The new projects will be required, given the underlying growth in the economy, to simply keep the region competitive in the quality and quantity of infrastructure availability.

Figure 3.22 shows the expenditure profile of identified engineering construction projects. A sharp decline indicates the completion of one or more major projects, while a sharp rise indicates the commencement of one or more identified major projects. The rundown of expenditures on the major road projects for the Brisbane region over the last couple of years is clearly indicated along with the assumed introduction of the major rail project in 2017.

3.7.4 Regional construction activity profile – Gold Coast

For the Gold Coast, construction activity peaked in 2008. The stimulus package, that is, the strong contribution to growth from public non-residential construction expenditure, enabled the Gold Coast’s construction activity to remain close to the 2008 level in the 2010 fiscal year. The stimulus to measures offset falls in private engineering ad dwelling construction.

However, once stimulus was wound back, Gold Coast construction activity fell sharply. In 2011, due to a combined $836 million fall in private dwelling investment together with the fall in public non-residential building expenditure as the stimulus was reduced, fully explained the 15% fall in total construction activity.

In 2012 the decline in construction activity is estimated at 1.7% with the growth in private engineering investment neutralising the full wind back of the stimulus and the decline in private dwelling investment slowing significantly compared to the previous fiscal year.

In 2013 a similar decline in Gold Coast construction activity is predicted as what occurred in 2012. Private engineering project completions will subtract 7.7% from growth. However, this will be largely offset by modest gains in dwelling and public non-residential dwelling activity. The same pattern continues in 2014 and 2015, with construction activity in both years remaining close to 2013 levels. The upswing in private dwelling construction gains momentum in 2014.

Over the period 2015 to 2022, private dwelling expenditures, on average, contributes just under 2% to growth and private non-residential construction activity 0.6% to annual growth. These two components explain three quarters of the total average growth in construction activity for the period.

The outlook is considerably subdued compared to the growth rates experienced over the 2000 to 2005 period, where new private dwelling construction increased by 70% with the growth driving the “catch up” growth in non-residential and engineering expenditures over the 2005 to 2008 period.

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As pointed out in the housing affordability section above, the growth is unlikely to be repeated. The established price differential with the rest of Australia has been reduced and the cost of house construction and the established dwelling prices are high, compared to the ability of households to support mortgage payments from income that can be earned from work in the Gold Coast labour market catchment.

As a result, the subdued outlook means that the Gold Coast is likely to experience a steady increase in housing shortages over the next decade.

3.7.5 Regional construction activity profile – Sunshine Coast

The past performance and future outlook for the Sunshine Coast is similar to the Gold Coast at least in terms of dwelling expenditures. Between 2000 and 2005 new private dwelling construction activity increased by 73%. However, 2005 was the peak. The average private new dwelling construction expenditure stabilised over the 2006 to 2009 period at a level that was 20% below the 2005 peak. Over the 2010 to 2012 period the decline in private residential new construction expenditures was just under half $1 billion.

Over the 2013 to 2014 period project completion in private engineering will subtract about 20% from total construction activity while the commencement of a new public non-residential building construction project, a hospital project, will add approximately the same amount. Project completion and commencement timings will determine whether there is a degree of instability in activity or alternatively a stable construction outlook over this period.

3.7.6 Regional construction activity profile – West Moreton

The profile for West Moreton in terms of construction activity reflects that of a region where the change in population is relatively small on a state-wide basis, that is just under 2000 per annum but accelerating over the period. That is between 2011 and 2015 the population increase per annum increases to 2500 while over the second half of the projection period the increase is 3600 per annum. Over the historical period 2004 to 2012 the average increase in West Moreton construction expenditures was of the order of $30 million per annum. The increase in population growth, at least in absolute terms, will require that this increases to $37 million per annum over the projection period.

3.7.5 Regional construction activity profile – Darling Downs

The Darling Downs, in comparison with the other regions, has a unique profile, both in terms of the immediate past and the immediate future. The dwelling and private non-residential building cycle has been, and will be to 2014, more stable than compared to the larger neighbouring regions. Also, the build up in LNG infrastructure supply has started to make an impact. The average annual growth in the percentage point contribution of new dwelling construction expenditures on total Darling downs construction activity over the period 2009 to 2014 is estimated at 0.2% per annum.

The oscillations in gas infrastructure supply expenditures will cause instability over the next four years as projects are completed and others commenced. After 2014, the generally sustained expansion in the dwelling construction expenditures will ensure that underlying growth in Darling Downs construction will be of the order of, on average, 1.0% per annum once the pull-through effect on engineering and commercial non-residential building asset creation is taken into account.

65

3.7.6 Regional construction activity profile – Northern region

Unlike Darling Downs, the impact of the dwelling cycle has been severe. The cumulative fall in new private dwelling construction over the three years to 2011 has represented 12% of total Northern region construction. The completion of engineering projects lead to a net 14% fall in total Northern region construction activity in 2012 which is projected to be followed by a similar decline in 2013.

In 2010 the stimulus measures for public non-residential construction increased total region construction by 8.9%, which more than offset the dwelling construction decline. The impact of the fiscal stimulus was reversed in 2011 subtracting 8.6% from total Northern region construction activity. Due to project completions, a similar subtraction from northern region construction activity from public non-residential building expenditures is projected for 2014 from public non-residential building construction expenditures.

Over the period 2012 to 2014 the average annual decline in construction activity in the northern region is projected at just over 10%.

However, this should signal the end of the downward trend. From 2015 generally across-the-board increases in most areas of construction activity will result in an average annual growth rate of 7.7% per annum between 2015 and 2018. Over the last four years of the projection period the average annual growth rate in total construction activity is negligible.

3.7.7 Regional construction activity profile – the Far North region

The far North region in terms of its economic base has been significantly adversely affected by the impact of the GFC in the so-called Dutch disease where the high exchange rate has adversely impacted on its non-mining trade exposed industries. As a result between 2010 and 2014 the average annual decline in total construction activity in the far North region is estimated at just under 7% per annum.

The total cumulative fall in new dwelling construction activity was 25% in the three years to 2011. The sharpest fall was 10% in 2009, which was almost completely offset by a 9% increase in public non-residential construction activity as a result of the fiscal stimulus.

In the immediate past the biggest decline in construction activity was in 2010 the 21% fall was due to across-the-board declines in most areas of construction activity. Since then, that is over 2011 and 2012 years construction activity has been flat with a small increase in 2011 offset by a small decline in 2012. This will change in 2013 where private engineering project completions is estimated to subtract 10% from the total construction activity growth rate reinforced by a negative contribution by public non-residential building project completions which will subtract 6% from the overall construction activity growth rates. In 2013 there will be offsetting small positive contributions to growth from other areas of construction activity with the result that the projected decline in total activity is 12%.

The 2014 year is expected to have a similar level of activity as the previous year. Over the 2015 to 2018 period a modest recovery in new private dwelling construction and increased expenditures on identified private engineering projects will drive an increase in overall activity. The average annual growth rate over this period is projected 8.6% per annum. Similar to a number of other regions over the 2019 to 2022 period the average annual growth rate in total construction activity is negligible, and in fact for this region a small negative.

66

Figure 3.22: Change in expenditure on identified engineering projects – Brisbane (CVM $m)

-2000

-1500

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-500

0

500

1000

1500

2000

2500

3000

3500

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

CMV $m

Brisbane heavy industry Brisbane non-heavy industry

Figure 3.23: Change in expenditure on identified engineering projects – Gold Coast (CVM $m)

-600

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-200

0

200

400

600

800

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

CMV $m

Gold Coast heavy industry Gold Coast non-heavy industry

67

Figure 3.24: Change in expenditure on identified engineering projects – Sunshine Coast (CVM $m)

-500

-400

-300

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-100

0

100

200

300

400

500

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

CMV $m

Sunshine Coast heavy industry Sunshine Coast non-heavy industry

Figure 3.25: Change in expenditure on identified engineering projects – West Moreton (CVM $m)

-60

-40

-20

0

20

40

60

80

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

CMV $m

West Moreton heavy industry West Moreton non-heavy industry

68

Figure 3.26: Change in expenditure on identified engineering projects – Wide Bay-Burnett (CVM $m)

-800

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-400

-200

0

200

400

600

800

1000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

CMV $m

Wide Bay-Burnett heavy industry Wide Bay-Burnett non-heavy industry

Figure 3.27: Change in expenditure on identified engineering projects – Darling Downs (CVM $m)

-3000

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-2000

-1500

-1000

-500

0

500

1000

1500

2000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

CMV $m

Darling Downs heavy industry Darling Downs non-heavy industry

69

Figure 3.28: Change in expenditure on identified engineering projects – South West (CVM $m)

-1500

-1000

-500

0

500

1000

1500

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

CMV $m

South West heavy industry South West non-heavy industry

Figure 3.29: Change in expenditure on identified engineering projects – Fitzroy (CVM $m)

-5000

-4000

-3000

-2000

-1000

0

1000

2000

3000

4000

5000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

CMV $m

Fitzroy heavy industry Fitzroy non-heavy industry

70

Figure 3.30: Change in expenditure on identified engineering projects – Central West (CVM $m)

-100

-50

0

50

100

150

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

CMV $m

Central West heavy industry Central west non-heavy industry

Figure 3.31: Change in expenditure on identified engineering projects – Mackay (CVM $m)

-4000

-3000

-2000

-1000

0

1000

2000

3000

4000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

CMV $m

Mackay heavy industry Mackay non-heavy industry

71

Figure 3.32: Change in expenditure on identified engineering projects – Northern (CVM $m)

-500

-400

-300

-200

-100

0

100

200

300

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

CMV $m

Northern heavy industry Northern non-heavy industry

Figure 3.33: Change in expenditure on identified engineering projects – Far North (CVM $m)

-150

-100

-50

0

50

100

150

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

CMV $m

Far North heavy industry Far North non-heavy industry

72

Figure 3.34: Change in expenditure on identified engineering projects – North West (CVM $m)

-500

-400

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-200

-100

0

100

200

300

400

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

CMV $m

North West heavy industry North West non-heavy industry

73

Table 3.5 Formation of construction in Brisbane (CVM $m) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Change in: Private dwelling new construction -75.0 130.8 28.8 -301.4 -237.7 -371.0 6.3 -340.2 758.4 425.2 548.4 665.0 565.8 -253.1 196.5 371.2 -407.3 Other dwelling 190.1 158.0 -129.6 -146.0 167.0 81.8 95.3 -202.5 -4.4 141.7 93.2 90.9 59.7 -35.6 6.5 73.0 -145.9 Private non-residential building 599.8 330.9 773.5 -175.4 -1207.9 -105.0 329.8 -71.5 -154.4 -202.7 347.0 131.5 133.9 174.6 108.8 3.7 -115.1 Public non-residential building 99.8 131.6 -116.8 278.6 284.2 816.9 -645.6 -739.3 -36.4 -132.9 44.3 34.5 -28.9 26.1 59.1 61.0 19.0 Private engineering 516.9 832.3 1092.8 1597.2 -1017.7 41.3 587.1 -1716.5 -1660.4 450.0 -503.9 1327.9 2082.3 251.6 -135.5 -394.5 -219.8 Public engineering 370.4 159.8 -8.3 -50.3 116.8 36.0 43.4 115.5 242.8 -66.7 250.5 -329.7 736.3 929.6 92.2 752.0 -358.7 Total construction 1702.0 1743.5 1640.4 1202.7 -1895.4 500.1 416.3 -2954.5 -854.4 614.6 779.5 1920.1 3549.1 1093.2 327.5 866.4 -1227.8 Percentage point contribution to growth: Private dwelling new construction -0.6 0.9 0.2 -1.6 -1.2 -2.1 0.0 -1.8 4.8 2.9 3.6 4.1 3.1 -1.2 0.9 1.6 -1.7 Other dwelling 1.4 1.1 -0.8 -0.8 0.9 0.5 0.5 -1.1 0.0 1.0 0.6 0.6 0.3 -0.2 0.0 0.3 -0.6 Private non-residential building 4.5 2.2 4.6 -1.0 -6.2 -0.6 1.8 -0.4 -1.0 -1.4 2.3 0.8 0.7 0.8 0.5 0.0 -0.5 Public non-residential building 0.8 0.9 -0.7 1.5 1.5 4.6 -3.6 -4.0 -0.2 -0.9 0.3 0.2 -0.2 0.1 0.3 0.3 0.1 Private engineering 3.9 5.6 6.5 8.7 -5.2 0.2 3.2 -9.2 -10.6 3.0 -3.3 8.2 11.5 1.2 -0.6 -1.7 -0.9 Public engineering 2.8 1.1 0.0 -0.3 0.6 0.2 0.2 0.6 1.6 -0.5 1.6 -2.0 4.1 4.3 0.4 3.3 -1.5 Total construction 12.8 11.6 9.8 6.5 -9.7 2.8 2.3 -15.9 -5.5 4.2 5.1 11.9 19.6 5.0 1.4 3.8 -5.1

Table 3.6 Formation of construction in Gold Coast (CVM $m) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Change in: Private dwelling new construction -149.9 16.0 -172.6 -198.5 -242.5 -635.7 -256.8 23.8 462.9 252.6 228.4 218.5 163.1 -99.9 51.4 108.9 -146.0 Other dwelling 86.2 100.0 -42.4 -62.7 44.2 -200.6 -58.8 130.4 71.4 40.9 25.2 21.5 14.6 -23.3 -7.6 18.7 -60.3 Private non-residential building -47.5 150.4 -139.3 1.5 114.0 -146.1 3.5 -23.6 -19.4 -44.8 130.7 85.6 47.4 53.1 32.2 -1.5 -38.2 Public non-residential building -28.0 113.2 -99.8 -19.2 885.4 -267.6 -451.8 135.1 -223.3 -16.9 -0.8 -4.8 -9.0 -7.8 -17.5 20.9 9.5 Private engineering 310.2 216.4 686.1 155.5 -549.0 335.5 630.9 -405.1 -378.6 -71.1 19.9 537.1 -42.9 -176.1 -1.4 59.6 161.3 Public engineering -22.1 225.0 -10.2 -26.5 -72.2 -29.5 44.6 41.7 73.8 -136.1 -21.4 -8.9 63.5 -39.0 0.3 72.3 8.7 Total construction 148.8 821.0 221.8 -150.0 179.8 -944.1 -88.4 -97.8 -13.3 24.6 382.0 849.1 236.5 -293.0 57.4 278.9 -65.0 Percentage point contribution to growth: Private dwelling new construction -3.0 0.3 -2.9 -3.2 -4.0 -10.2 -4.8 0.5 9.0 4.9 4.4 4.0 2.6 -1.5 0.8 1.7 -2.2 Other dwelling 1.7 1.9 -0.7 -1.0 0.7 -3.2 -1.1 2.5 1.4 0.8 0.5 0.4 0.2 -0.4 -0.1 0.3 -0.9 Private non-residential building -0.9 2.9 -2.3 0.0 1.9 -2.3 0.1 -0.5 -0.4 -0.9 2.5 1.6 0.7 0.8 0.5 0.0 -0.6 Public non-residential building -0.6 2.2 -1.7 -0.3 14.6 -4.3 -8.5 2.6 -4.4 -0.3 0.0 -0.1 -0.1 -0.1 -0.3 0.3 0.1 Private engineering 6.2 4.2 11.4 2.5 -9.0 5.4 11.9 -7.7 -7.4 -1.4 0.4 9.7 -0.7 -2.7 0.0 0.9 2.4 Public engineering -0.4 4.3 -0.2 -0.4 -1.2 -0.5 0.8 0.8 1.4 -2.7 -0.4 -0.2 1.0 -0.6 0.0 1.1 0.1 Total construction 3.0 15.8 3.7 -2.4 3.0 -15.1 -1.7 -1.9 -0.3 0.5 7.4 15.4 3.7 -4.4 0.9 4.4 -1.0

74

Table 3.7 Formation of construction in Sunshine Coast (CVM $m) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Change in: Private dwelling new construction -265.6 -36.1 79.1 -107.3 -187.1 -142.0 -133.8 -15.2 209.7 127.6 147.1 162.8 136.7 -41.4 49.4 83.0 -91.8 Other dwelling 51.0 43.8 -37.0 -43.3 23.6 -129.7 -37.2 85.6 49.7 27.0 15.8 13.6 10.2 -13.3 -3.0 14.1 -36.8 Private non-residential building 111.7 -27.7 -83.7 -22.6 -68.6 -18.0 122.6 -56.6 16.5 -14.0 59.7 50.1 24.6 27.6 18.5 3.0 -14.7 Public non-residential building 22.1 -16.4 19.8 25.2 58.1 -41.2 -31.3 -22.3 444.5 17.6 -9.3 -164.3 -261.2 24.2 57.4 8.4 -1.3 Private engineering 13.8 264.0 167.8 -49.1 2.4 567.2 -34.1 -628.7 -150.2 211.5 -88.9 300.0 -30.0 -88.8 1.7 22.3 94.8 Public engineering 134.9 -158.1 68.7 65.8 14.5 9.7 -3.4 -21.7 -2.2 11.0 30.2 -23.1 45.5 -17.9 3.5 53.3 0.4 Total construction 67.8 69.6 214.7 -131.2 -157.0 246.0 -117.2 -658.9 568.1 380.7 154.6 339.2 -74.3 -109.7 127.4 184.2 -49.3 Percentage point contribution to growth: Private dwelling new construction -9.1 -1.2 2.6 -3.3 -6.0 -4.8 -4.2 -0.5 8.6 4.2 4.3 4.6 3.5 -1.1 1.3 2.2 -2.3 Other dwelling 1.8 1.5 -1.2 -1.3 0.8 -4.4 -1.2 2.8 2.0 0.9 0.5 0.4 0.3 -0.3 -0.1 0.4 -0.9 Private non-residential building 3.8 -0.9 -2.7 -0.7 -2.2 -0.6 3.8 -1.8 0.7 -0.5 1.8 1.4 0.6 0.7 0.5 0.1 -0.4 Public non-residential building 0.8 -0.6 0.6 0.8 1.9 -1.4 -1.0 -0.7 18.2 0.6 -0.3 -4.6 -6.7 0.6 1.6 0.2 0.0 Private engineering 0.5 8.9 5.5 -1.5 0.1 19.1 -1.1 -20.3 -6.1 7.0 -2.6 8.5 -0.8 -2.3 0.0 0.6 2.4 Public engineering 4.6 -5.3 2.3 2.0 0.5 0.3 -0.1 -0.7 -0.1 0.4 0.9 -0.7 1.2 -0.5 0.1 1.4 0.0 Total construction 2.3 2.3 7.0 -4.0 -5.0 8.3 -3.6 -21.2 23.3 12.6 4.6 9.6 -1.9 -2.9 3.4 4.8 -1.2

Table 3.8 Formation of construction in West Moreton (CVM $m) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Change in: Private dwelling new construction 9.7 -7.3 -11.6 33.3 13.0 -35.4 -31.6 28.8 29.3 25.5 35.6 43.7 42.8 -1.1 22.4 30.5 -22.1 Other dwelling 6.5 8.6 -5.8 -5.5 7.4 -5.9 4.0 4.2 3.5 6.2 5.2 5.3 4.6 0.5 2.4 5.6 -4.6 Private non-residential building 31.5 -23.5 6.2 11.2 -16.5 -0.4 -0.5 -9.3 2.3 15.0 35.2 28.2 -14.9 -11.7 2.9 1.4 -2.3 Public non-residential building 20.0 24.2 -26.5 187.2 -120.3 -55.3 -19.1 -5.5 -4.2 3.3 8.0 7.9 -5.0 3.2 19.5 6.8 1.7 Private engineering -18.9 -54.1 63.9 -9.9 -38.9 112.7 41.6 -78.5 -88.6 -37.8 -6.6 0.0 0.0 0.0 1.5 -1.5 0.0 Public engineering 70.6 49.8 -24.3 4.8 19.6 -36.1 -14.7 15.2 43.6 65.7 60.4 17.8 46.9 -104.9 -22.1 48.4 58.3 Total construction 119.4 -2.4 1.9 221.2 -135.7 -20.3 -20.3 -45.2 -14.2 77.9 137.8 103.0 74.3 -114.1 26.5 91.2 31.0 Percentage point contribution to growth: Private dwelling new construction 2.1 -1.3 -2.0 5.8 1.6 -5.4 -5.0 4.7 5.1 4.6 5.6 5.7 4.9 -0.1 2.7 3.5 -2.3 Other dwelling 1.4 1.5 -1.0 -1.0 0.9 -0.9 0.6 0.7 0.6 1.1 0.8 0.7 0.5 0.0 0.3 0.7 -0.5 Private non-residential building 7.0 -4.1 1.1 2.0 -2.1 -0.1 -0.1 -1.5 0.4 2.7 5.5 3.6 -1.7 -1.2 0.3 0.2 -0.2 Public non-residential building 4.4 4.2 -4.6 32.7 -15.2 -8.4 -3.0 -0.9 -0.7 0.6 1.3 1.0 -0.6 0.3 2.3 0.8 0.2 Private engineering -4.2 -9.4 11.2 -1.7 -4.9 17.2 6.5 -12.7 -15.5 -6.8 -1.0 0.0 0.0 0.0 0.2 -0.2 0.0 Public engineering 15.6 8.7 -4.3 0.8 2.5 -5.5 -2.3 2.5 7.6 11.8 9.5 2.3 5.3 -11.0 -2.6 5.6 6.1 Total construction 26.4 -0.4 0.3 38.7 -17.1 -3.1 -3.2 -7.3 -2.5 14.0 21.7 13.3 8.5 -12.0 3.2 10.6 3.2

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Table 3.9 Formation of construction in Wide Bay/Burnett (CVM $m) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Change in: Private dwelling new construction 66.0 71.0 -12.7 -129.4 -70.8 -136.8 -102.7 -22.0 106.5 68.8 71.4 42.5 29.8 -37.3 14.1 29.6 -73.6 Other dwelling 29.9 35.0 -5.2 -15.9 19.3 -3.9 -26.5 6.2 11.3 15.8 9.0 8.4 3.5 -8.7 -3.2 5.2 -21.3 Private non-residential building 86.8 -47.1 -2.2 -19.3 47.3 -77.2 -36.9 -26.6 4.2 7.8 38.4 47.9 14.4 13.4 8.7 1.0 -7.6 Public non-residential building 11.7 -22.0 -1.8 5.0 101.2 -26.1 -67.5 -13.9 -9.6 4.3 12.9 14.2 -5.3 7.5 31.5 7.2 0.6 Private engineering -1.0 -3.2 84.9 18.4 -141.0 240.2 694.8 -86.8 -284.7 -235.0 -247.0 93.8 -86.1 5.1 -51.0 -50.8 15.4 Public engineering 104.7 33.3 15.3 22.1 -6.4 40.1 16.7 49.0 98.1 -167.4 -3.7 -23.3 58.5 -88.4 -13.5 71.0 33.2 Total construction 298.1 67.0 78.4 -119.1 -50.4 36.2 477.9 -94.1 -74.3 -305.6 -119.1 183.5 14.9 -108.5 -13.3 63.3 -53.2 Percentage point contribution to growth: Private dwelling new construction 4.0 3.7 -0.6 -6.2 -3.6 -7.1 -5.3 -0.9 4.6 3.0 3.6 2.3 1.5 -1.8 0.7 1.5 -3.7 Other dwelling 1.8 1.8 -0.3 -0.8 1.0 -0.2 -1.4 0.3 0.5 0.7 0.5 0.5 0.2 -0.4 -0.2 0.3 -1.1 Private non-residential building 5.3 -2.4 -0.1 -0.9 2.4 -4.0 -1.9 -1.1 0.2 0.3 2.0 2.6 0.7 0.7 0.5 0.1 -0.4 Public non-residential building 0.7 -1.1 -0.1 0.2 5.1 -1.4 -3.5 -0.6 -0.4 0.2 0.7 0.8 -0.3 0.4 1.6 0.4 0.0 Private engineering -0.1 -0.2 4.2 0.9 -7.2 12.5 35.6 -3.6 -12.2 -10.4 -12.6 5.1 -4.3 0.2 -2.6 -2.7 0.8 Public engineering 6.4 1.7 0.8 1.1 -0.3 2.1 0.9 2.0 4.2 -7.4 -0.2 -1.3 2.9 -4.3 -0.7 3.7 1.7 Total construction 18.1 3.5 3.9 -5.7 -2.6 1.9 24.5 -3.9 -3.2 -13.5 -6.1 10.0 0.7 -5.3 -0.7 3.3 -2.7

Table 3.10 Formation of construction in Darling Downs (CVM $m) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Change in: Private dwelling new construction 69.3 18.0 -78.1 -53.7 88.6 5.1 -70.4 12.0 70.8 48.2 57.4 46.9 32.7 -34.4 15.8 32.3 -65.6 Other dwelling 12.6 18.6 -7.2 -11.1 12.8 50.6 33.0 -58.7 -17.2 13.2 10.2 9.9 7.0 -1.9 1.3 6.9 -12.2 Private non-residential building 24.1 82.6 -99.0 22.0 17.5 26.3 -17.6 -28.5 -8.3 -5.7 30.7 25.7 12.5 13.4 8.4 1.0 -7.6 Public non-residential building 5.0 -24.4 15.4 -25.5 70.4 -6.1 -39.4 -18.5 -4.5 5.3 14.7 16.7 -5.1 9.2 37.1 6.3 -0.3 Private engineering -69.5 -294.8 120.8 88.8 -123.7 114.7 979.9 1252.6 338.7 -1083.5 -918.8 -54.7 -233.3 6.8 70.3 -13.1 56.7 Public engineering 87.4 100.7 -100.5 -60.2 57.5 47.7 17.2 14.6 40.5 25.4 64.9 -47.3 53.0 9.7 30.9 75.7 -24.2 Total construction 128.9 -99.4 -148.7 -39.6 123.1 238.2 902.6 1173.6 420.0 -997.1 -740.9 -2.8 -133.2 2.8 163.8 109.1 -53.2 Percentage point contribution to growth: Private dwelling new construction 5.0 1.2 -5.5 -4.2 7.2 0.4 -4.4 0.5 1.9 1.2 1.9 2.0 1.4 -1.5 0.7 1.4 -2.6 Other dwelling 0.9 1.2 -0.5 -0.9 1.0 3.7 2.1 -2.3 -0.5 0.3 0.3 0.4 0.3 -0.1 0.1 0.3 -0.5 Private non-residential building 1.7 5.4 -6.9 1.7 1.4 1.9 -1.1 -1.1 -0.2 -0.1 1.0 1.1 0.5 0.6 0.4 0.0 -0.3 Public non-residential building 0.4 -1.6 1.1 -2.0 5.7 -0.4 -2.5 -0.7 -0.1 0.1 0.5 0.7 -0.2 0.4 1.7 0.3 0.0 Private engineering -5.0 -19.3 8.5 6.9 -10.0 8.4 61.2 50.0 9.2 -26.4 -29.6 -2.3 -9.9 0.3 3.2 -0.5 2.3 Public engineering 6.3 6.6 -7.0 -4.7 4.6 3.5 1.1 0.6 1.1 0.6 2.1 -2.0 2.2 0.4 1.4 3.2 -1.0 Total construction 9.2 -6.5 -10.4 -3.1 9.9 17.5 56.4 46.9 11.4 -24.3 -23.9 -0.1 -5.7 0.1 7.4 4.6 -2.1

76

Table 3.11 Formation of construction in South West (CVM $m) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Change in: Private dwelling new construction 3.5 3.9 -1.7 -0.8 1.7 -4.2 5.6 14.1 2.8 2.4 5.5 8.9 8.3 -0.6 2.1 2.9 -3.9 Other dwelling 0.5 1.4 1.6 -3.3 0.1 4.8 2.8 -4.8 -0.4 2.3 2.0 2.1 2.1 1.2 1.5 2.1 -0.5 Private non-residential building 2.7 1.0 -5.8 2.9 5.2 1.5 12.3 12.7 -7.1 -5.1 -1.8 -6.3 0.9 1.6 0.9 0.0 -0.9 Public non-residential building 10.2 -8.3 8.0 -8.5 15.0 2.4 -16.2 5.6 -6.9 0.2 0.7 0.7 -0.4 0.3 1.2 0.6 0.1 Private engineering -4.9 -17.4 461.8 27.2 -278.4 -75.6 785.5 739.7 231.1 -172.3 -435.1 -190.7 -463.9 -217.2 -59.8 -20.7 25.9 Public engineering 4.5 5.3 -13.4 -5.2 6.3 -6.8 66.3 -3.8 21.5 10.5 16.5 -31.7 14.1 -10.3 1.3 25.6 -0.3 Total construction 16.6 -14.3 450.4 12.3 -250.1 -77.9 856.2 763.5 241.1 -161.9 -412.3 -217.0 -438.9 -224.9 -52.9 10.5 20.5 Percentage point contribution to growth: Private dwelling new construction 2.5 2.5 -1.2 -0.1 0.3 -1.2 2.0 1.2 0.1 0.1 0.3 0.6 0.6 -0.1 0.3 0.5 -0.6 Other dwelling 0.4 0.9 1.1 -0.5 0.0 1.4 1.0 -0.4 0.0 0.1 0.1 0.1 0.2 0.1 0.2 0.3 -0.1 Private non-residential building 1.9 0.6 -4.1 0.5 0.9 0.4 4.4 1.1 -0.4 -0.2 -0.1 -0.4 0.1 0.2 0.1 0.0 -0.1 Public non-residential building 7.3 -5.3 5.6 -1.4 2.5 0.7 -5.9 0.5 -0.4 0.0 0.0 0.0 0.0 0.0 0.2 0.1 0.0 Private engineering -3.5 -11.1 323.2 4.6 -46.0 -21.3 283.0 65.2 12.2 -8.1 -22.0 -12.2 -34.4 -23.9 -8.8 -3.3 4.0 Public engineering 3.2 3.3 -9.4 -0.9 1.0 -1.9 23.9 -0.3 1.1 0.5 0.8 -2.0 1.0 -1.1 0.2 4.1 0.0 Total construction 11.8 -9.1 315.2 2.1 -41.3 -21.9 308.5 67.3 12.7 -7.6 -20.9 -13.9 -32.6 -24.8 -7.7 1.7 3.2

Table 3.12 Formation of construction in Fitzroy (CVM $m) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Change in: Private dwelling new construction 62.0 138.5 42.9 -117.1 -108.3 -13.2 116.0 97.9 69.3 43.8 58.2 74.9 67.5 -28.5 32.4 55.5 -44.6 Other dwelling 14.5 22.2 1.8 -20.1 23.9 19.7 -6.5 26.7 -16.1 12.0 15.5 19.1 10.3 3.4 7.7 13.7 -10.4 Private non-residential building 29.0 35.4 -19.2 90.1 -101.0 28.3 112.1 167.9 -103.3 -47.0 -4.8 -51.8 13.1 21.8 13.0 0.7 -12.2 Public non-residential building 18.8 15.0 -16.0 -9.3 60.2 37.5 -44.8 1.3 -41.1 0.7 9.7 10.8 -3.8 5.6 15.8 4.1 0.0 Private engineering 161.8 402.9 356.9 861.7 808.1 1276.4 4567.5 1810.0 -586.5 583.5 -553.9 -2556.5 -1803.7 -719.2 -33.1 146.6 415.6 Public engineering 206.8 -256.5 -123.4 -24.3 84.5 62.9 -18.6 110.3 213.5 -134.7 3.3 -192.0 56.8 60.7 17.3 104.6 -11.3 Total construction 493.0 357.6 242.9 780.9 767.4 1411.6 4725.6 2214.1 -464.2 458.2 -471.9 -2695.6 -1659.7 -656.2 53.1 325.2 337.1 Percentage point contribution to growth: Private dwelling new construction 4.1 6.9 1.8 -4.5 -3.2 -0.3 2.1 1.0 0.6 0.4 0.5 0.6 0.7 -0.4 0.5 0.8 -0.6 Other dwelling 1.0 1.1 0.1 -0.8 0.7 0.5 -0.1 0.3 -0.1 0.1 0.1 0.2 0.1 0.0 0.1 0.2 -0.1 Private non-residential building 1.9 1.8 -0.8 3.5 -3.0 0.7 2.0 1.6 -0.8 -0.4 0.0 -0.4 0.1 0.3 0.2 0.0 -0.2 Public non-residential building 1.3 0.7 -0.7 -0.4 1.8 0.9 -0.8 0.0 -0.3 0.0 0.1 0.1 0.0 0.1 0.2 0.1 0.0 Private engineering 10.8 20.2 15.2 33.2 23.9 30.8 82.2 17.6 -4.7 4.8 -4.4 -21.3 -19.3 -9.4 -0.5 2.1 5.6 Public engineering 13.7 -12.8 -5.2 -0.9 2.5 1.5 -0.3 1.1 1.7 -1.1 0.0 -1.6 0.6 0.8 0.2 1.5 -0.2 Total construction 32.8 17.9 10.3 30.1 22.7 34.0 85.0 21.5 -3.7 3.8 -3.8 -22.4 -17.8 -8.6 0.8 4.6 4.6

77

Table 3.13 Formation of construction in Central West (CVM $m) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Change in: Private dwelling new construction 0.5 -0.4 1.5 0.3 0.2 0.0 2.6 3.7 7.7 3.0 2.2 4.8 4.3 -1.3 0.7 1.6 -1.5 Other dwelling 0.9 -0.1 0.5 -0.5 0.5 2.8 3.6 -3.8 -0.4 1.2 1.3 1.6 1.3 1.0 1.1 1.3 0.0 Private non-residential building -1.8 -3.7 2.2 -1.0 1.7 -1.5 0.2 -0.8 -0.4 0.5 1.5 2.0 0.5 0.4 0.2 -0.1 -0.3 Public non-residential building 0.3 -0.4 1.3 -0.1 2.3 22.3 -19.9 7.0 -10.4 -1.0 -1.4 -1.2 0.0 0.1 0.1 0.0 0.0 Private engineering 0.6 -25.7 10.3 26.5 -10.9 38.9 34.1 57.8 20.6 -19.9 -51.4 -43.2 -62.5 -9.0 -1.4 -0.5 0.9 Public engineering 3.0 15.5 -7.0 -8.6 0.9 -8.6 8.9 -1.9 9.3 8.6 7.3 -12.6 3.9 -3.8 2.7 10.6 2.2 Total construction 3.5 -15.0 8.7 16.5 -5.3 53.9 29.6 61.9 26.3 -7.6 -40.4 -48.6 -52.4 -12.6 3.3 13.0 1.2 Percentage point contribution to growth: Private dwelling new construction 0.6 -0.5 1.8 0.3 0.2 0.0 1.7 2.0 3.1 1.1 0.8 2.1 2.4 -1.0 0.7 1.4 -1.2 Other dwelling 1.0 -0.1 0.6 -0.6 0.4 2.7 2.3 -2.1 -0.2 0.4 0.5 0.7 0.8 0.8 0.9 1.1 0.0 Private non-residential building -1.9 -3.9 2.7 -1.1 1.6 -1.5 0.1 -0.4 -0.2 0.2 0.6 0.9 0.3 0.3 0.2 -0.1 -0.3 Public non-residential building 0.3 -0.5 1.6 -0.1 2.1 22.1 -12.8 3.8 -4.2 -0.4 -0.5 -0.5 0.0 0.1 0.1 0.0 0.0 Private engineering 0.6 -26.7 12.7 29.4 -10.2 38.4 22.0 31.3 8.3 -7.3 -19.4 -19.2 -35.4 -7.2 -1.3 -0.4 0.7 Public engineering 3.2 16.1 -8.6 -9.5 0.9 -8.5 5.8 -1.0 3.8 3.2 2.8 -5.6 2.2 -3.0 2.4 9.2 1.7 Total construction 3.8 -15.6 10.8 18.4 -4.9 53.2 19.1 33.5 10.7 -2.8 -15.2 -21.6 -29.7 -10.1 3.0 11.3 0.9

Table 3.14 Formation of construction in Mackay (CVM $m) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Change in: Private dwelling new construction 117.0 56.7 38.7 -121.5 35.2 -87.7 -12.9 75.1 28.0 27.0 41.8 23.5 14.8 -45.6 -1.0 12.4 -72.6 Other dwelling 11.7 24.1 3.1 2.5 13.2 -30.3 -13.8 35.4 23.1 12.8 11.2 11.2 6.2 -2.4 0.8 6.3 -13.7 Private non-residential building 90.0 28.1 -3.6 69.8 -106.6 235.1 -200.6 65.6 -43.0 -21.2 27.7 2.9 12.4 16.3 10.7 0.6 -10.8 Public non-residential building 2.8 -2.8 1.1 -10.3 173.6 -20.5 -135.6 47.0 -54.4 1.0 3.8 3.3 -3.3 0.7 3.4 5.0 1.8 Private engineering 181.9 788.5 211.6 236.6 479.5 941.4 853.1 2824.5 -363.7 -2756.5 -553.8 -1018.6 -194.1 210.7 638.7 119.8 -1056.3 Public engineering 95.4 -24.2 23.8 163.1 -10.6 -85.1 -142.5 -66.6 68.6 -53.1 149.6 -32.8 -45.0 -47.0 285.6 136.5 -306.2 Total construction 498.8 870.5 274.6 340.2 584.3 952.8 347.7 2981.0 -341.3 -2790.0 -319.8 -1010.6 -209.1 132.6 938.2 280.6 -1457.8 Percentage point contribution to growth: Private dwelling new construction 10.7 3.6 1.6 -4.4 1.1 -2.4 -0.3 1.5 0.4 0.4 0.9 0.5 0.4 -1.4 0.0 0.3 -1.6 Other dwelling 1.1 1.5 0.1 0.1 0.4 -0.8 -0.3 0.7 0.3 0.2 0.2 0.2 0.2 -0.1 0.0 0.1 -0.3 Private non-residential building 8.2 1.8 -0.1 2.5 -3.5 6.4 -4.3 1.3 -0.5 -0.3 0.6 0.1 0.4 0.5 0.3 0.0 -0.2 Public non-residential building 0.3 -0.2 0.0 -0.4 5.6 -0.6 -2.9 0.9 -0.7 0.0 0.1 0.1 -0.1 0.0 0.1 0.1 0.0 Private engineering 16.6 49.4 8.6 8.6 15.6 25.7 18.5 56.9 -4.6 -36.2 -11.5 -22.7 -5.6 6.4 18.7 2.8 -22.8 Public engineering 8.7 -1.5 1.0 5.9 -0.3 -2.3 -3.1 -1.3 0.9 -0.7 3.1 -0.7 -1.3 -1.4 8.4 3.1 -6.6 Total construction 45.4 54.5 11.1 12.4 19.0 26.0 7.5 60.0 -4.3 -36.7 -6.6 -22.5 -6.0 4.0 27.5 6.5 -31.5

78

Table 3.15 Formation of construction in Northern (CVM $m) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Change in: Private dwelling new construction 95.7 41.2 71.8 -24.5 -151.8 -129.9 6.0 17.5 98.2 71.7 72.0 60.9 45.7 -41.6 16.5 37.3 -68.0 Other dwelling 13.4 25.0 -11.8 -2.9 82.1 -56.8 -54.1 17.1 36.4 20.0 13.7 18.3 6.2 -1.8 3.9 10.9 -17.3 Private non-residential building 56.8 11.0 -11.3 35.6 -61.6 37.4 53.0 -116.8 40.7 -21.1 38.8 23.8 13.1 15.9 9.9 0.2 -10.8 Public non-residential building -29.9 184.3 -112.8 -19.6 225.7 -203.5 86.3 31.6 -140.7 -13.9 1.6 2.0 -1.9 -3.2 -19.3 5.1 2.0 Private engineering 290.0 125.7 89.1 87.5 -314.1 182.0 -328.3 -308.0 -147.5 66.6 -41.9 155.2 -52.1 -53.6 -8.4 -33.1 67.8 Public engineering 72.9 -19.4 -36.6 -6.3 37.3 -8.4 31.6 13.9 22.5 -11.0 46.2 -37.2 53.8 4.9 13.0 71.8 -17.6 Total construction 498.8 367.7 -11.6 69.9 -182.4 -179.2 -205.5 -344.8 -90.4 112.2 130.3 223.1 64.8 -79.5 15.6 92.2 -43.9 Percentage point contribution to growth: Private dwelling new construction 5.9 1.9 2.9 -1.0 -6.0 -5.5 0.3 0.9 6.0 4.7 4.4 3.4 2.3 -2.0 0.8 1.9 -3.2 Other dwelling 0.8 1.2 -0.5 -0.1 3.2 -2.4 -2.5 0.9 2.2 1.3 0.8 1.0 0.3 -0.1 0.2 0.5 -0.8 Private non-residential building 3.5 0.5 -0.5 1.4 -2.4 1.6 2.4 -5.9 2.5 -1.4 2.3 1.3 0.7 0.8 0.5 0.0 -0.5 Public non-residential building -1.8 8.7 -4.5 -0.8 8.9 -8.6 4.0 1.6 -8.6 -0.9 0.1 0.1 -0.1 -0.2 -1.0 0.3 0.1 Private engineering 17.9 5.9 3.6 3.5 -12.4 7.7 -15.1 -15.6 -9.0 4.3 -2.5 8.7 -2.6 -2.6 -0.4 -1.7 3.2 Public engineering 4.5 -0.9 -1.5 -0.3 1.5 -0.4 1.4 0.7 1.4 -0.7 2.8 -2.1 2.7 0.2 0.7 3.6 -0.8 Total construction 30.8 17.4 -0.5 2.8 -7.2 -7.6 -9.4 -17.5 -5.5 7.3 7.9 12.5 3.2 -3.8 0.8 4.6 -2.1

Table 3.16 Formation of construction in Far North (CVM $m) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Change in: Private dwelling new construction 99.4 48.1 140.2 -218.4 -177.6 -116.3 28.6 24.3 103.2 73.2 69.6 56.3 41.2 -40.3 12.0 27.4 -78.8 Other dwelling 17.2 31.2 -10.7 -17.7 26.2 -52.9 -45.9 57.1 22.3 11.7 10.6 12.0 4.2 -7.0 -1.1 7.3 -21.5 Private non-residential building -97.8 -1.2 68.0 -5.9 -115.4 32.4 -20.5 -41.1 8.6 8.4 56.6 64.9 16.8 15.6 9.1 -0.7 -11.4 Public non-residential building 35.5 -2.9 30.8 191.3 -115.2 21.6 60.6 -100.3 -34.2 -33.5 -5.4 -5.8 3.8 -2.9 -19.9 0.9 0.1 Private engineering 25.1 69.4 83.7 96.7 -54.0 172.2 -132.4 -172.0 -134.3 111.5 -12.8 102.1 -63.3 -44.7 -7.6 -35.4 65.0 Public engineering 53.7 -54.4 -39.0 -18.4 -31.8 -14.5 69.2 20.3 31.4 -14.1 44.4 -24.1 62.5 -5.3 10.6 75.2 -13.0 Total construction 133.1 90.3 273.0 27.8 -467.9 42.6 -40.4 -211.7 -3.0 157.2 163.0 205.4 65.1 -84.6 3.1 74.8 -59.7 Percentage point contribution to growth: Private dwelling new construction 5.9 2.7 7.4 -10.1 -8.1 -6.7 1.6 1.4 6.8 4.8 4.2 3.1 2.0 -1.9 0.6 1.4 -3.8 Other dwelling 1.0 1.7 -0.6 -0.8 1.2 -3.1 -2.6 3.3 1.5 0.8 0.6 0.7 0.2 -0.3 -0.1 0.4 -1.0 Private non-residential building -5.8 -0.1 3.6 -0.3 -5.3 1.9 -1.2 -2.4 0.6 0.6 3.4 3.5 0.8 0.7 0.5 0.0 -0.5 Public non-residential building 2.1 -0.2 1.6 8.8 -5.2 1.3 3.4 -5.8 -2.3 -2.2 -0.3 -0.3 0.2 -0.1 -1.0 0.0 0.0 Private engineering 1.5 3.8 4.4 4.5 -2.5 10.0 -7.5 -9.9 -8.8 7.4 -0.8 5.6 -3.1 -2.1 -0.4 -1.7 3.1 Public engineering 3.2 -3.0 -2.1 -0.8 -1.4 -0.8 3.9 1.2 2.1 -0.9 2.7 -1.3 3.1 -0.3 0.5 3.7 -0.6 Total construction 8.0 5.0 14.4 1.3 -21.3 2.5 -2.3 -12.2 -0.2 10.4 9.7 11.2 3.2 -4.0 0.2 3.7 -2.8

79

Table 3.17 Formation of construction in North West (CVM $m) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Change in: Private dwelling new construction 5.0 2.5 7.9 -1.9 1.7 -2.2 -2.9 -1.3 11.9 8.8 7.7 6.6 4.3 -3.3 -0.6 0.1 -6.4 Other dwelling 0.5 -1.5 0.4 2.1 -2.0 1.1 4.7 0.1 0.1 -1.0 1.2 2.3 0.6 0.7 1.0 1.1 -0.6 Private non-residential building 5.6 -1.2 6.9 -5.9 1.5 14.2 -9.2 -2.2 0.5 -1.3 3.3 2.2 1.3 1.5 0.7 -0.3 -1.2 Public non-residential building -1.2 1.9 2.6 -5.6 13.6 12.8 -7.2 34.4 -39.4 -3.4 -3.5 -3.3 1.6 -1.4 -4.1 -0.1 0.0 Private engineering 14.7 -5.6 13.8 134.5 -18.3 2.7 267.3 262.3 -130.6 -93.2 -76.3 -88.1 -200.9 3.1 90.5 -63.6 -62.1 Public engineering 26.4 -2.6 -35.8 -34.8 -8.8 26.4 -6.2 5.9 10.8 -1.8 11.4 -15.2 2.6 3.8 3.7 16.2 -5.7 Total construction 51.1 -6.4 -4.2 88.4 -12.3 55.1 246.5 299.0 -146.7 -92.0 -56.2 -95.5 -190.5 4.4 91.2 -46.7 -76.1 Percentage point contribution to growth: Private dwelling new construction 2.6 1.0 3.3 -0.8 0.5 -0.7 -0.8 -0.2 1.3 1.1 1.1 1.1 0.8 -1.0 -0.2 0.0 -1.7 Other dwelling 0.2 -0.6 0.2 0.9 -0.6 0.4 1.3 0.0 0.0 -0.1 0.2 0.4 0.1 0.2 0.3 0.3 -0.2 Private non-residential building 2.9 -0.5 2.9 -2.5 0.5 4.5 -2.5 -0.4 0.1 -0.2 0.5 0.4 0.2 0.5 0.2 -0.1 -0.3 Public non-residential building -0.6 0.8 1.1 -2.3 4.2 4.1 -1.9 5.6 -4.3 -0.4 -0.5 -0.5 0.3 -0.4 -1.2 0.0 0.0 Private engineering 7.5 -2.3 5.7 56.7 -5.6 0.9 72.5 42.6 -14.3 -12.2 -11.3 -14.2 -38.4 0.9 26.8 -14.8 -16.3 Public engineering 13.4 -1.0 -14.8 -14.7 -2.7 8.4 -1.7 1.0 1.2 -0.2 1.7 -2.5 0.5 1.1 1.1 3.8 -1.5 Total construction 26.0 -2.6 -1.7 37.3 -3.8 17.6 66.9 48.6 -16.1 -12.0 -8.3 -15.4 -36.4 1.3 27.0 -10.9 -19.9

80

Table 3.18 Total construction: average annual growth rates by Queensland regions

1993-2011 2011-2015 2015-2022

Brisbane 4.3 -4.1 5.7Gold Coast 5.9 -0.8 3.6Sunshine Coast 4.6 1.3 2.3West Moreton 3.1 -0.1 6.5Wide Bay/Burnett 3.3 0.0 -0.2Darling Downs 3.5 18.0 -3.3South West 6.8 63.4 -14.5Fitzroy 7.9 22.4 -6.6Central West 3.7 14.4 -9.8Mackay 11.2 1.1 -5.8Northern 4.8 -6.7 3.2Far North 2.6 -1.4 2.9North West 4.8 16.4 -10.7Queensland 5.1 3.8 0.4Note: Fiscal years.

Table 3.19 Drivers of construction growth by Queensland region 2011-2022 (average annual $m change between span years) 2011-2015 2016-2022

New

dwellings

Non-residential

con-struction

Engineer-ing

Total con-struction

New dwellings

Non-residential

con-struction

Engineer-ing

Total con-struction

Brisbane 118.1 -188.2 -385.5 -455.6 261.2 142.8 640.0 1044.0 Gold Coast -34.0 -211.0 21.2 -223.8 73.3 42.8 90.4 206.6 Sunshine Coast 8.3 83.6 -8.2 83.7 63.8 -25.3 43.3 81.7 West Moreton 5.7 -14.7 4.6 -4.4 24.4 11.5 14.0 50.0 Wide Bay/ Burnett -16.7 -48.3 73.0 8.0 9.9 26.4 -41.0 -4.6 Darling Downs 17.3 -19.4 349.6 347.5 15.2 23.2 -131.9 -93.5 South West 5.1 -0.1 319.3 324.2 4.8 -0.3 -192.3 -187.8 Fitzroy 69.9 22.3 1576.9 1669.1 39.3 3.2 -723.6 -681.1 Central West 4.1 -0.8 29.5 32.8 2.6 0.3 -22.4 -19.5 Mackay 11.3 -25.3 244.0 230.0 -1.1 10.7 -244.7 -235.1 Northern 5.2 -49.4 -97.3 -141.5 22.4 11.0 24.1 57.5 Far North 21.1 -19.6 -12.5 -11.0 13.1 17.4 21.9 52.4 North West 3.8 -0.1 68.7 72.4 2.1 -0.5 -54.4 -52.8 Queensland 219.4 -471.2 2183.2 1931.4 531.0 263.1 -576.4 217.8

81

Table 3.20 Contribution of each region to Queensland construction growth

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Average 2000-2005

Average 2006-2012

Average 2013- 2015

Average 2016-2022

Percentage point contribution Brisbane 5.5 5.0 4.2 2.8 -4.2 1.1 0.9 -5.5 -1.5 1.1 1.5 3.6 6.8 2.0 0.6 1.6 -2.1 2.3 2.2 -2.0 2.0

Gold Coast 0.5 2.3 0.6 -0.4 0.4 -2.2 -0.2 -0.2 0.0 0.0 0.7 1.6 0.5 -0.5 0.1 0.5 -0.1 1.6 0.2 -0.1 0.4

Sunshine Coast 0.2 0.2 0.5 -0.3 -0.3 0.6 -0.3 -1.2 1.0 0.7 0.3 0.6 -0.1 -0.2 0.2 0.3 -0.1 0.9 0.1 0.2 0.2

West Moreton 0.4 0.0 0.0 0.5 -0.3 0.0 0.0 -0.1 0.0 0.1 0.3 0.2 0.1 -0.2 0.0 0.2 0.1 0.1 0.1 0.0 0.1

Wide Bay/ Burnett 1.0 0.2 0.2 -0.3 -0.1 0.1 1.0 -0.2 -0.1 -0.5 -0.2 0.3 0.0 -0.2 0.0 0.1 -0.1 0.4 0.3 -0.3 0.0

Darling Downs 0.4 -0.3 -0.4 -0.1 0.3 0.5 2.0 2.2 0.7 -1.8 -1.4 0.0 -0.3 0.0 0.3 0.2 -0.1 0.3 0.4 0.4 -0.2

South West 0.1 0.0 1.1 0.0 -0.6 -0.2 1.9 1.4 0.4 -0.3 -0.8 -0.4 -0.8 -0.4 -0.1 0.0 0.0 0.0 0.3 0.5 -0.4

Fitzroy 1.6 1.0 0.6 1.8 1.7 3.2 10.3 4.1 -0.8 0.8 -0.9 -5.1 -3.2 -1.2 0.1 0.6 0.6 0.2 2.9 1.4 -1.3

Central West 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.1 0.0 0.0 -0.1 -0.1 -0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Mackay 1.6 2.5 0.7 0.8 1.3 2.2 0.8 5.6 -0.6 -5.0 -0.6 -1.9 -0.4 0.2 1.8 0.5 -2.5 0.1 1.4 0.0 -0.4

Northern 1.6 1.0 0.0 0.2 -0.4 -0.4 -0.4 -0.6 -0.2 0.2 0.2 0.4 0.1 -0.1 0.0 0.2 -0.1 0.3 0.2 -0.2 0.1

Far North 0.4 0.3 0.7 0.1 -1.0 0.1 -0.1 -0.4 0.0 0.3 0.3 0.4 0.1 -0.2 0.0 0.1 -0.1 0.3 0.1 0.0 0.1

North West 0.2 0.0 0.0 0.2 0.0 0.1 0.5 0.6 -0.3 -0.2 -0.1 -0.2 -0.4 0.0 0.2 -0.1 -0.1 -0.1 0.1 0.0 -0.1

Queensland 13.4 12.1 8.2 5.4 -3.3 5.3 16.4 5.8 -1.3 -4.5 -0.8 -0.5 2.4 -0.8 3.3 4.3 -4.7 6.3 8.2 0.0 0.4

82

4. Queensland construction: resources, capacity and price pressures

4.1 Utilisation of capacity

Queensland entered the new century with a high level of under-utilised capacity. In 2001 and 2002 the demand deficiency, relative to normal capacity utilisation rates, was between $5.5 and $6.5 billion in CVM prices. Over the next few years demand grew faster than capacity so that by 2006 an excess of demand resulted. Excess demand, that is, capacity utilisation rates above normal, increased from $1 billion in 2006 to $5 billion in 2008. This represented above normal utilisation rates of 10%. There was a similar situation of excess demand in 2009.

In 2010 the excess demand had been almost eliminated, and by 2011 the level of under-utilised capacity reached $1 billion annually. In 2012 the construction industry is estimated to be operating at near balance. That is, at normal capacity utilisation rates. In 2013 the level of capacity utilisation is projected to fall by 5 percentage points below normal levels, indicating a deficiency of demand of $2.4 billion. In 2014 it is projected to increase to 7.4% under-utilisation of capacity and to just under 11% by 2015. If it is realised, it will represent an under-utilisation of demand of $6.4 billion.

The upswing in construction activity over the 2016 to 2021 period, is similar to the 2000 to 2006 cycle, and results in excess capacity being eliminated by 2021. However, this downturn in economic activity in the last year of the projection period will result in an under-utilisation of capacity of just under 5%.

4.2 Labour shortage/surplus

The capacity utilisation cycle mirrors the labour shortage cycle. The peak period for labour shortages was in 2008 and 2009, where labour shortages reached 25,000. This represents:

(i) the employment of under-qualified/inexperienced labour; and

(ii) excess hours of work.

In 2012 there was a labour surplus of 2,200, down from a surplus of 6,000 in 2011. However, labour surplus is expected to quickly increase in 2013 to 2016, reaching a total of 27,000 in 2016. After 2016, the upswing in the growth of construction activity will result in the surplus labour being eliminated by 2021.

The overall assessment is one where, from a Queensland perspective, labour supply bottlenecks are unlikely to occur. However, the projection tables of labour shortages/surplus at the regional level indicate substantial labour supply bottlenecks. Fitzroy and Mackay will experience labour supply shortages of between 5,000 and 10,000 over the next few years. However, provided the South East Queensland construction workforce is reasonably flexible and appropriate to the tasks required in Fitzroy and Mackay, the shortages will be manageable. The shortages in Fitzroy and Mackay represent between 30% and 40% of the surplus labour being generated in South East Queensland over the next three years.

83

There are two factors which would invalidate this conclusion. One is the labour requirements for the rest of Australia and Western Australia in particular, resulting in an outflow of construction skills to other States. The other case is the employment of construction skilled workers in mining production.

To be certain that the Queensland construction industry will be able to cope with the relatively subdued demand over the medium-terms (aside from LNG requirements), a Queensland-wide/industry-wide demand and supply of skills analysis would have to be taken into account. This is beyond the scope of this report.

The survey results at July 2012 of the state of the construction sector in Queensland regions included in this report contains a number of expressed concerns as to the future supply of skills to the construction industry due to changes or the capacity of the industry to train apprentices.

4.3 Cost pressure

The data in the attached tables and figures indicates a relationship between cost/price pressure for Queensland construction and the level of labour shortages. However, the relationship is one where the change in the level of shortages is as an important driver as the level of shortages.

Given the:

(i) lagged productivity adjustment to the 2002-2009 employment build-up; and

(ii) the subdued expectations for the non-engineering construction sector,

it is not surprising that Figure 4.2 indicates an outlook over the next year of construction costs that are, at best, stabilised and, as indicted in the figure, experience a small decline.

84

Figure 4.1: Unused capacity in Queensland’s construction sector

-30

-25

-20

-15

-10

-5

0

5

10

15

Figure 4.2: Real construction costs versus labour shortage

-8000

-6000

-4000

-2000

0

2000

4000

-6

-4

-2

0

2

4

6

8

10

Real total QLD construction total price growth (LHS)

QLD construction excess capacity (a positve denotes excess capacity) - RHS

85

Figure 4.3: Queensland labour shortage and real quarterly price growth

-1.0

-0.8

-0.6

-0.4

-0.2

0.0

0.2

0.4

0.6

0.8

-27

-24

-21

-18

-15

-12

-9

-6

-3

0Per centLabour shortage

Labour shortage (LHS) Real quarterly construction sector price growth

Figure 4.4: Annual growth in Queensland construction employment (%)

0

1

2

3

4

5

6Per cent

86

Table 4.1 Unutilised capacity in Queensland and Australian construction sectors: (a positive represents excess capacity)

Fiscal years 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Queensland 1.3 -2.4 -0.8 -5.0 -7.4 -10.7 -10.6 -6.4 -2.1 -3.7 -2.7 0.0 -4.8

Table 4.2 Construction industry employment by Queensland regions

Fiscal years 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Brisbane 102505 100085 93383 87454 81886 80300 81095 85903 96671 104215 108239 111789 110072 Gold Coast 36285 40105 40898 39965 39258 38808 39806 43211 45542 45423 45346 46067 45973 Sunshine Coast 18575 19015 20251 17646 18002 19240 20221 21613 21978 21733 21872 22359 22351 West Moreton 2785 1900 2997 2608 2376 2397 2656 2963 3238 3150 3139 3282 3391 Wide Bay/Burnett 11935 9675 9553 9916 9885 9162 8506 8527 8527 8261 8061 8051 7900 Darling Downs 10642 10274 9702 14222 17451 16472 14073 12810 11799 11248 11309 11542 11476 South West 1323 1021 1035 2675 3745 4076 3765 3355 2661 2063 1701 1524 1451 Fitzroy 12753 12651 15833 19723 21118 22130 22090 19514 16651 14567 13511 13206 13283 Central West 527 541 564 681 778 811 759 654 518 429 388 385 384 Mackay 10665 10057 9232 12557 13804 11621 10173 8435 7335 6880 7495 8023 6912 Northern 14813 14312 13113 11885 10926 10758 11036 11820 12353 12311 12278 12480 12388 Far North 12340 14785 13265 12654 12277 12642 13389 14477 15190 15153 15072 15233 15021 North West 1632 1688 1516 2352 2502 2406 2252 2004 1555 1333 1365 1298 1138 Queensland 236780 236110 231343 234337 234007 230822 229820 235287 244018 246765 249776 255239 251739

87

Table 4.3 Queensland regional construction excess capacity utilisation rates (%)

Fiscal years 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Brisbane -1.1 -1.1 -5.7 -22.2 -27.8 -26.1 -23.4 -15.4 -0.1 3.7 3.9 6.6 0.2 Gold Coast 9.6 -6.1 -3.2 -7.3 -9.7 -11.4 -6.5 6.1 8.3 2.0 1.5 4.4 2.3 Sunshine Coast -3.9 4.2 -2.2 -24.6 -8.9 0.4 3.3 11.2 7.2 2.4 4.2 7.5 4.7 West Moreton -8.8 -12.5 -19.0 -26.8 -30.3 -22.6 -7.9 2.0 7.8 -7.6 -7.2 0.0 0.8 Wide Bay/Burnett 0.7 -16.5 -11.0 -15.8 -19.9 -31.9 -36.8 -31.3 -31.7 -36.1 -37.4 -36.1 -38.5 Darling Downs 0.8 -8.9 18.3 71.0 87.4 39.5 4.9 3.6 -3.4 -4.4 1.4 4.8 1.5 South West -9.3 -47.0 75.0 191.8 226.9 200.0 136.6 102.8 35.9 1.6 -6.7 -5.6 -2.7 Fitzroy 2.7 2.5 51.2 79.5 68.8 71.4 62.4 24.1 0.5 -9.5 -10.2 -7.4 -4.4 Central West -12.8 17.2 16.2 53.8 68.2 62.5 37.8 7.8 -24.4 -32.1 -30.1 -22.2 -21.4 Mackay 4.5 4.7 -6.6 45.2 35.1 -16.7 -23.9 -42.2 -46.7 -45.6 -31.9 -28.8 -51.9 Northern 6.7 0.8 -11.9 -28.9 -34.3 -30.9 -26.6 -18.6 -17.2 -21.4 -21.9 -19.4 -21.9 Far North -5.5 -1.8 -3.9 -17.0 -18.5 -11.5 -3.8 5.9 8.3 3.0 2.2 5.1 1.4 North West -4.3 -5.0 34.5 98.3 65.0 43.9 31.2 10.4 -30.1 -29.5 -10.7 -20.5 -36.3 Queensland 1.3 -2.4 -0.8 -5.0 -7.4 -10.7 -10.6 -6.4 -2.1 -3.7 -2.7 0.0 -4.8

Table 4.4 Queensland regional construction – excess demand of labour (a positive indicates a shortage of labour) – number

Fiscal years 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Brisbane -1023 -1125 -5893 -23210 -29358 -27867 -25027 -16514 -79 3979 4251 7130 192 Gold Coast 3732 -2438 -1320 -3077 -4162 -4937 -2830 2680 3683 892 651 1985 1015 Sunshine Coast -732 802 -434 -4896 -1799 90 671 2320 1504 499 882 1585 1003 West Moreton -254 -365 -569 -810 -933 -707 -248 63 253 -253 -243 -1 26 Wide Bay/Burnett 78 -1939 -1337 -1935 -2442 -3946 -4568 -3899 -3953 -4521 -4691 -4549 -4855 Darling Downs 86 -949 1990 7782 9645 4386 547 396 -381 -491 161 537 166 South West -132 -682 1116 2835 3342 2938 1994 1493 519 23 -96 -79 -38 Fitzroy 325 306 6646 10455 9177 9642 8470 3288 68 -1306 -1407 -1032 -614 Central West -66 89 84 280 355 324 194 40 -123 -161 -150 -109 -104 Mackay 443 476 -713 4943 3913 -1896 -2739 -4892 -5473 -5391 -3802 -3452 -6258 Northern 907 112 -1769 -4327 -5194 -4744 -4105 -2886 -2670 -3344 -3426 -3043 -3451 Far North -743 -250 -555 -2469 -2704 -1685 -564 868 1216 437 324 742 208 North West -67 -79 555 1581 1045 705 499 165 -478 -465 -167 -318 -556 Queensland 2555 -6042 -2199 -12849 -19116 -27698 -27706 -16879 -5913 -10103 -7712 -605 -13266

88

Table 4.5 Queensland regional construction – level of activity increase in economic capacity (2009 $ million)

Fiscal years 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Brisbane -152 -188 -1067 -4459 -5460 -5534 -5812 -3962 -18 857 898 1467 41 Gold Coast 555 -408 -239 -591 -774 -980 -657 643 841 192 138 408 217 Sunshine Coast -109 134 -79 -941 -335 18 156 557 343 107 186 326 214 West Moreton -38 -61 -103 -156 -174 -140 -58 15 58 -55 -51 0 6 Wide Bay/Burnett 12 -324 -242 -372 -454 -784 -1061 -936 -902 -974 -991 -936 -1037 Darling Downs 13 -159 360 1495 1794 871 127 95 -87 -106 34 110 35 South West -20 -114 202 545 622 583 463 358 119 5 -20 -16 -8 Fitzroy 48 51 1203 2009 1707 1915 1967 789 15 -281 -297 -212 -131 Central West -10 15 15 54 66 64 45 10 -28 -35 -32 -23 -22 Mackay 66 80 -129 950 728 -376 -636 -1174 -1249 -1162 -803 -710 -1337 Northern 135 19 -320 -831 -966 -942 -953 -692 -610 -721 -724 -626 -737 Far North -110 -42 -101 -474 -503 -335 -131 208 278 94 69 153 44 North West -10 -13 101 304 194 140 116 40 -109 -100 -35 -65 -119 Queensland 380 -1010 -398 -2469 -3555 -5500 -6434 -4050 -1350 -2177 -1629 -124 -2833

Table 4.6 Regional construction industry employment by segment

Fiscal years 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Employment – building Brisbane 25077 25656 30403 28291 28816 28398 29744 31867 34854 36538 38409 40064 39302 Gold Coast 9811 11350 14063 13846 14672 15399 16410 17911 19285 19190 19336 19774 19361 Sunshine Coast 4688 4860 6582 5778 6188 6618 7274 7779 8172 8029 8126 8383 8215 West Moreton 564 398 837 837 835 794 828 942 1062 1078 1087 1131 1124 Wide Bay/Burnett 2752 2303 2767 2826 3279 3300 3117 3058 3110 2980 2948 2972 2810 Darling Downs 2527 2567 3110 4326 5708 5840 5320 4949 4687 4365 4371 4491 4336 South West 187 218 285 842 1099 1188 1172 1117 979 779 651 585 543 Fitzroy 1982 1898 2602 3650 3833 3971 4128 4023 3702 3242 3052 3022 2953 Central West 77 80 104 141 159 173 173 168 151 124 111 108 105 Mackay 1967 2001 2408 3157 3377 3093 2811 2467 2182 1971 2040 2169 1914 Northern 3631 3587 4078 3649 3547 3544 3753 4006 4250 4213 4236 4324 4144 Far North 3217 4010 4419 4062 4270 4473 4832 5255 5600 5551 5565 5642 5357 North West 167 210 249 405 348 352 355 343 294 243 230 222 194 Queensland 56648 59138 71906 71808 76131 77144 79916 83886 88328 88302 90163 92887 90358

89

Table 4.6 Regional construction industry employment by segment (continued)

Fiscal years 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Employment – engineering Brisbane 8822 8700 7412 7004 5563 5682 5105 5580 7298 8341 8421 8611 8547 Gold Coast 2259 2532 2634 2189 1889 1690 1547 1776 1797 1713 1688 1721 1866 Sunshine Coast 1140 1413 1269 881 477 551 522 641 716 660 627 643 698 West Moreton 137 124 181 144 113 99 94 91 107 88 76 83 98 Wide Bay/Burnett 1006 878 904 1048 900 627 407 370 352 319 278 275 297 Darling Downs 734 671 598 1285 1645 1209 691 544 445 424 418 425 453 South West 326 159 139 347 572 608 478 390 229 144 107 93 94 Fitzroy 2731 2786 3426 3878 4383 4704 4435 3432 2512 2046 1820 1763 1885 Central West 121 126 116 138 189 185 149 97 51 37 33 35 36 Mackay 1616 1378 1090 1516 1725 1099 844 563 452 443 561 613 433 Northern 1611 1648 1452 1088 881 911 859 967 978 939 941 965 1045 Far North 720 1026 863 792 654 732 706 734 737 711 714 733 800 North West 360 317 258 368 409 363 305 234 124 108 133 116 94 Queensland 21581 21757 20342 20680 19399 18459 16141 15418 15798 15973 15816 16075 16346 Employment – construction services Brisbane 68606 65730 55568 52159 47507 46221 46246 48457 54519 59337 61409 63114 62223 Gold Coast 24215 26224 24201 23930 22697 21719 21849 23524 24460 24519 24321 24573 24745 Sunshine Coast 12747 12742 12400 10986 11338 12070 12425 13193 13090 13045 13119 13333 13438 West Moreton 2084 1378 1979 1627 1428 1503 1735 1930 2069 1984 1976 2067 2169 Wide Bay/Burnett 8177 6494 5882 6042 5706 5235 4981 5099 5066 4961 4834 4804 4793 Darling Downs 7381 7035 5995 8610 10098 9423 8062 7318 6667 6458 6519 6625 6687 South West 810 644 611 1486 2073 2280 2115 1847 1454 1141 943 847 814 Fitzroy 8040 7968 9805 12194 12902 13455 13527 12059 10437 9280 8639 8422 8445 Central West 328 335 344 403 431 453 438 389 316 268 244 243 243 Mackay 7082 6679 5733 7884 8702 7429 6517 5406 4701 4466 4895 5241 4564 Northern 9571 9077 7584 7148 6498 6302 6424 6847 7124 7159 7101 7191 7199 Far North 8403 9749 7984 7800 7353 7437 7851 8488 8854 8891 8793 8858 8864 North West 1105 1161 1008 1579 1745 1692 1593 1427 1138 982 1002 960 851 Queensland 158551 155215 139094 141848 138477 135220 133763 135982 139892 142490 143796 146278 145036

90

Table 4.6 Regional construction industry employment by segment (continued)

Fiscal years 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Employment – total

Brisbane 102505 100085 93383 87454 81886 80300 81095 85903 96671 104215 108239 111789 110072

Gold Coast 36285 40105 40898 39965 39258 38808 39806 43211 45542 45423 45346 46067 45973

Sunshine Coast 18575 19015 20251 17646 18002 19240 20221 21613 21978 21733 21872 22359 22351

West Moreton 2785 1900 2997 2608 2376 2397 2656 2963 3238 3150 3139 3282 3391

Wide Bay/Burnett 11935 9675 9553 9916 9885 9162 8506 8527 8527 8261 8061 8051 7900

Darling Downs 10642 10274 9702 14222 17451 16472 14073 12810 11799 11248 11309 11542 11476

South West 1323 1021 1035 2675 3745 4076 3765 3355 2661 2063 1701 1524 1451

Fitzroy 12753 12651 15833 19723 21118 22130 22090 19514 16651 14567 13511 13206 13283

Central West 527 541 564 681 778 811 759 654 518 429 388 385 384

Mackay 10665 10057 9232 12557 13804 11621 10173 8435 7335 6880 7495 8023 6912

Northern 14813 14312 13113 11885 10926 10758 11036 11820 12353 12311 12278 12480 12388

Far North 12340 14785 13265 12654 12277 12642 13389 14477 15190 15153 15072 15233 15021

North West 1632 1688 1516 2352 2502 2406 2252 2004 1555 1333 1365 1298 1138

Queensland 236780 236110 231343 234337 234007 230822 229820 235287 244018 246765 249776 255239 251739

91

5. Quarterly profiles

The attached tables of quarterly profiles are consistent with the annual profiles discussed above to June 2014.

92

Table 5.1 Value of work done: Residential new construction (including major additions) by region– chain volume measure 2009-10 reference year ($ million)

Annual growth rate

2011-12

Sep. 2011-12

Dec. 2011-12

Mar. 2011-12

Jun. 2012-13

Sep. 2012-13

Dec. 2012-13

Mar. 2012-13

Jun. 2013-14

Sep. 2013-14

Dec. 2013-14

Mar. 2013-14

Jun. 2012-13 2013-14

Actual Forecast

Brisbane 1052 1018 1049 922 885 874 936 1006 1060 1114 1128 1157 -8.4 20.5

Gold Coast 212 197 197 173 168 175 209 252 283 312 327 345 3.1 57.6

Sunshine Coast 174 161 163 144 142 145 160 179 194 208 213 222 -2.4 33.4

West Moreton 40 37 41 41 45 47 48 49 52 54 55 57 18.0 15.6

Wide Bay/Burnett 100 92 92 82 79 81 88 96 104 112 115 120 -6.0 31.0

Darling Downs 89 85 89 85 86 87 92 96 102 108 109 113 3.4 19.7

South West 4 4 5 6 7 8 9 9 9 9 9 9 71.1 8.3

Fitzroy 88 96 116 118 124 126 131 134 140 146 147 151 23.5 13.4

Central West 2 2 3 2 3 3 4 4 5 5 6 6 38.4 57.4

Mackay 87 87 100 103 111 113 115 113 117 121 120 122 20.0 6.2

Northern 95 98 109 104 103 102 107 112 121 130 133 138 4.3 23.2

Far North 80 86 98 95 94 91 96 102 112 121 124 130 6.8 26.9

North West 4 4 4 3 3 3 4 5 5 6 7 8 -8.4 81.7

Queensland 2028 1968 2066 1878 1848 1855 1999 2156 2303 2445 2494 2576 -1.0 24.9

93

Table 5.2 Value of work done: Non-residential building by region – chain volume measure 2009-10 reference year ($ million) Annual growth rate

2011-12

Sep. 2011-12

Dec. 2011-12

Mar. 2011-12

Jun. 2012-13

Sep. 2012-13

Dec. 2012-13

Mar. 2012-13

Jun. 2013-14

Sep. 2013-14

Dec. 2013-14

Mar. 2013-14

Jun. 2012-13 2013-14

Actual Forecast

Brisbane 1130 1027 827 725 678 725 754 742 703 678 666 661 -21.9 -6.6

Gold Coast 198 214 207 246 271 271 232 202 189 183 181 181 12.9 -24.8

Sunshine Coast 53 75 103 97 60 55 63 70 157 182 184 187 -24.1 185.5

West Moreton 10 10 12 12 8 7 7 7 7 7 7 7 -34.1 -6.8

Wide Bay/Burnett 31 28 29 27 21 18 17 18 17 17 17 17 -35.2 -7.3

Darling Downs 50 50 49 43 37 38 35 34 33 33 33 33 -24.5 -8.9

South West 8 5 5 9 13 13 11 9 8 8 8 8 66.0 -30.4

Fitzroy 42 55 97 137 146 140 115 100 91 89 88 88 51.1 -28.9

Central West 4 2 2 3 5 6 4 2 1 1 1 2 58.8 -64.7

Mackay 38 48 61 82 94 97 81 68 63 61 60 60 49.3 -28.6

Northern 60 94 146 174 137 98 77 76 73 71 71 72 -18.0 -25.8

Far North 126 113 80 57 51 58 64 61 55 52 51 50 -37.7 -10.9

North West 7 8 11 12 19 23 17 11 8 8 8 8 84.8 -55.5

Queensland 1756 1730 1626 1624 1541 1550 1477 1399 1407 1391 1374 1372 -11.4 -7.1

94

Table 5.3 Value of work done: Residential other renovations by region – chain volume measure 2009-10 reference year ($ million) Annual growth rate

2011-12

Sep. 2011-12

Dec. 2011-12

Mar. 2011-12

Jun. 2012-13

Sep. 2012-13

Dec. 2012-13

Mar. 2012-13

Jun. 2013-14

Sep. 2013-14

Dec. 2013-14

Mar. 2013-14

Jun. 2012-13 2013-14

Actual Forecast

Brisbane 789 701 702 679 707 670 669 640 648 663 676 685 -6.4 -0.6

Gold Coast 187 195 224 229 238 237 250 243 253 259 263 265 15.9 7.4

Sunshine Coast 118 123 142 145 151 150 159 155 162 165 168 169 16.7 7.8

West Moreton 27 26 27 27 28 27 28 27 27 28 29 29 2.2 4.2

Wide Bay/Burnett 83 79 84 83 86 83 85 82 84 86 87 88 2.5 2.7

Darling Downs 90 75 69 64 67 61 58 55 54 55 56 57 -19.5 -7.5

South West 8 7 6 6 6 5 5 5 5 5 5 6 -17.6 -2.2

Fitzroy 64 57 57 55 58 55 55 53 54 56 58 59 -4.5 2.6

Central West 4 3 2 2 2 2 2 2 2 2 2 2 -25.3 -5.5

Mackay 36 38 44 45 48 48 51 50 53 54 56 57 20.7 11.5

Northern 50 53 61 63 66 66 70 68 71 73 75 76 18.6 9.5

Far North 61 64 74 75 79 78 83 81 85 86 88 89 17.3 8.3

North West 2 2 2 2 2 2 2 2 2 2 2 2 19.1 10.9

Queensland 1520 1421 1493 1474 1538 1486 1518 1463 1500 1536 1564 1584 1.6 3.0

95

Table 5.4 Value of work done: Residential building by region – chain volume measure 2009-10 reference year ($ million) Annual growth rate

2011-12

Sep. 2011-12

Dec. 2011-12

Mar. 2011-12

Jun. 2012-13

Sep. 2012-13

Dec. 2012-13

Mar. 2012-13

Jun. 2013-14

Sep. 2013-14

Dec. 2013-14

Mar. 2013-14

Jun. 2012-13 2013-14

Actual Forecast

Brisbane 1840 1719 1751 1601 1592 1544 1606 1645 1708 1777 1803 1842 -7.6 11.6

Gold Coast 400 393 421 401 406 412 459 495 536 570 589 610 9.7 30.2

Sunshine Coast 292 285 304 289 293 296 319 334 355 372 381 391 6.2 20.7

West Moreton 67 63 68 68 72 74 76 76 79 82 84 86 11.7 11.4

Wide Bay/Burnett 183 171 176 164 165 164 173 178 188 198 202 208 -2.0 17.0

Darling Downs 180 160 158 149 152 148 150 150 155 163 166 170 -7.2 8.8

South West 12 11 11 12 13 14 14 14 14 14 15 15 20.3 4.2

Fitzroy 152 152 172 173 181 181 187 187 195 203 205 209 13.5 10.2

Central West 6 5 5 5 5 5 6 6 6 7 8 8 4.3 33.3

Mackay 123 125 144 148 158 161 167 163 169 175 176 179 20.2 7.8

Northern 146 150 170 166 168 168 176 180 192 203 208 214 9.4 17.9

Far North 141 150 172 170 172 170 179 183 196 207 212 218 11.3 18.4

North West 6 6 6 5 5 5 6 7 8 9 9 10 0.2 55.3

Queensland 3548 3389 3559 3352 3385 3341 3518 3619 3803 3981 4058 4160 0.1 15.4

96

Table 5.5 Value of work done: Total engineering construction activity by region – chain volume measure 2009-10 reference year ($ million) Annual growth rate

2011-12

Sep. 2011-12

Dec. 2011-12

Mar. 2011-12

Jun. 2012-13

Sep. 2012-13

Dec. 2012-13

Mar. 2012-13

Jun. 2013-14

Sep. 2013-14

Dec. 2013-14

Mar. 2013-14

Jun. 2012-13 2013-14

Actual Forecast

Brisbane 1913 2077 2135 1793 1834 1536 1518 1429 1288 1165 1209 1238 -20.2 -22.4

Gold Coast 665 711 736 628 620 579 605 574 552 501 519 501 -13.3 -12.8

Sunshine Coast 475 475 358 293 248 232 243 227 209 190 197 202 -40.6 -16.0

West Moreton 78 77 80 71 64 59 61 57 51 47 49 50 -20.7 -18.6

Wide Bay/Burnett 348 415 453 401 399 381 405 395 402 352 331 307 -2.3 -11.8

Darling Downs 308 385 445 523 644 690 787 807 861 795 834 817 76.3 13.0

South West 147 230 325 357 400 419 479 498 546 508 508 487 69.5 14.1

Fitzroy 1835 2754 2107 2596 2778 2982 2743 2709 2807 2599 2628 2805 20.7 -3.3

Central West 34 36 40 41 46 49 55 57 61 57 60 58 36.9 14.4

Mackay 928 949 997 1317 1582 1597 1845 1925 2010 1756 1597 1291 65.8 -4.2

Northern 236 224 207 163 151 132 132 122 116 99 98 98 -35.4 -23.3

Far North 183 187 185 153 147 136 141 133 128 111 108 107 -21.4 -18.5

North West 109 136 153 148 163 209 228 214 205 174 165 150 49.2 -14.7

Queensland 7260 8656 8221 8484 9076 8998 9242 9148 9237 8353 8303 8111 11.8 -6.7

97

Table 5.6 Value of work done: Total construction activity by region – chain volume measure 2009-10 reference year ($ million) Annual growth rate

2011-12

Sep. 2011-12

Dec. 2011-12

Mar. 2011-12

Jun. 2012-13

Sep. 2012-13

Dec. 2012-13

Mar. 2012-13

Jun. 2013-14

Sep. 2013-14

Dec. 2013-14

Mar. 2013-14

Jun. 2012-13 2013-14

Actual Forecast

Brisbane 4898 4839 4726 4134 4116 3813 3886 3827 3709 3633 3690 3755 -15.9 -5.5

Gold Coast 1264 1321 1366 1278 1299 1263 1298 1272 1279 1256 1291 1293 -1.9 -0.3

Sunshine Coast 821 835 765 679 602 583 625 632 722 745 762 781 -21.2 23.3

West Moreton 156 151 159 151 146 141 145 140 138 137 140 143 -7.3 -2.5

Wide Bay/Burnett 564 616 658 593 586 563 596 592 609 568 552 534 -3.9 -3.2

Darling Downs 538 595 653 716 834 876 973 993 1050 992 1033 1021 46.9 11.4

South West 168 246 341 378 426 446 504 521 568 530 531 509 67.3 12.7

Fitzroy 2031 2962 2378 2914 3118 3318 3057 3005 3101 2898 2927 3108 21.5 -3.7

Central West 44 43 48 50 57 60 65 65 70 66 69 68 33.5 10.7

Mackay 1093 1122 1203 1549 1837 1856 2095 2160 2245 1994 1836 1532 60.0 -4.3

Northern 453 481 530 511 460 399 388 383 387 379 383 390 -17.5 -5.5

Far North 456 455 438 382 375 370 390 383 385 375 376 380 -12.2 -0.2

North West 124 153 170 168 188 239 253 234 223 192 183 169 48.6 -16.1

Queensland 12610 13818 13437 13502 14043 13928 14275 14206 14486 13764 13774 13683 5.8 -1.3

98

Table 5.7 Value of work done: Total construction activity by region – chain volume measure 2009-10 reference year – Qtr. 3 2011-12 = 100

2011-12

Sep. 2011-12

Dec. 2011-12

Mar. 2011-12

Jun. 2012-13

Sep. 2012-13

Dec. 2012-13

Mar. 2012-13

Jun. 2013-14

Sep. 2013-14

Dec. 2013-14

Mar. 2013-14

Jun.

Actual Forecast

Brisbane 104 102 100 87 87 81 82 81 78 77 78 79

Gold Coast 93 97 100 93 95 92 95 93 94 92 94 95

Sunshine Coast 107 109 100 89 79 76 82 83 94 97 100 102

West Moreton 98 95 100 95 91 88 91 88 87 86 88 90

Wide Bay/Burnett 86 94 100 90 89 86 91 90 93 86 84 81

Darling Downs 82 91 100 110 128 134 149 152 161 152 158 156

South West 49 72 100 111 125 131 148 153 166 155 156 149

Fitzroy 85 125 100 123 131 140 129 126 130 122 123 131

Central West 92 91 100 105 120 125 136 137 146 139 146 143

Mackay 91 93 100 129 153 154 174 180 187 166 153 127

Northern 85 91 100 96 87 75 73 72 73 72 72 74

Far North 104 104 100 87 86 85 89 87 88 86 86 87

North West 73 90 100 98 110 140 148 137 131 113 108 99

Queensland 94 103 100 100 105 104 106 106 108 102 103 102

99

Table 5.8 Queensland construction industry – real quarterly price growth at annual rates (%)

2011-12 September

2011-12December

2011-12 March

2011-12 June

2012-13 September

2012-13December

2012-13 March

2012-13 June

2013-14 September

Average 2011-12 and

2013-14

Actual Forecast

Non-residential building 2.4 1.0 -0.1 -0.1 -0.3 -0.4 -0.4 -0.4 -0.3 0.2 Residential building -1.5 -4.3 -0.1 -1.1 -0.7 -0.9 -1.0 -0.9 -0.6 -1.2 Engineering construction -4.4 2.0 0.4 2.4 0.7 0.6 0.5 0.4 -0.1 0.3 Total construction -1.6 -1.4 0.0 -0.1 -0.3 -0.5 -0.6 -0.5 -0.4 -0.6

Note: Real price/cost growth is the nominal rate of increase less the increase in the Queensland financial demand implicit deflator.

Table 5.9 Shortage of construction labour by Queensland region – number ‘000 (shortage is donated by (+) and surplus (-)) Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14

Brisbane -10.2 -14.6 -18.9 -23.2 -24.7 -26.3 -27.8 -29.4 -29.0 -28.6 Gold Coast -1.8 -2.2 -2.6 -3.1 -3.3 -3.6 -3.9 -4.2 -4.4 -4.5 Sunshine Coast -1.5 -2.7 -3.8 -4.9 -4.1 -3.3 -2.6 -1.8 -1.3 -0.9 West Moreton -0.6 -0.7 -0.8 -0.8 -0.8 -0.9 -0.9 -0.9 -0.9 -0.8 Wide Bay/Burnett -1.5 -1.6 -1.8 -1.9 -2.1 -2.2 -2.3 -2.4 -2.8 -3.2 Darling Downs 3.4 4.9 6.3 7.8 8.2 8.7 9.2 9.6 8.3 7.0 South West 1.5 2.0 2.4 2.8 3.0 3.1 3.2 3.3 3.2 3.1 Fitzroy 7.6 8.6 9.5 10.5 10.1 9.8 9.5 9.2 9.3 9.4 Central West 0.1 0.2 0.2 0.3 0.3 0.3 0.3 0.4 0.3 0.3 Mackay 0.7 2.1 3.5 4.9 4.7 4.4 4.2 3.9 2.5 1.0 Northern -2.4 -3.0 -3.7 -4.3 -4.5 -4.8 -5.0 -5.2 -5.1 -5.0 Far North -1.0 -1.5 -2.0 -2.5 -2.5 -2.6 -2.6 -2.7 -2.4 -2.2 North West 0.8 1.1 1.3 1.6 1.4 1.3 1.2 1.0 1.0 0.9 Queensland -4.9 -7.5 -10.2 -12.8 -14.4 -16.0 -17.5 -19.1 -21.3 -23.4

100

Appendix A

Additional annual tables

101

Table A.1 Total regional population – ‘000

Fiscal years 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Brisbane 2056 2096 2136 2176 2216 2256 2297 2338 2378 2419 2460 Gold Coast 538 551 565 578 592 605 618 630 643 655 668 Sunshine Coast 334 341 348 356 364 372 380 389 398 406 415 West Moreton 98 101 103 106 109 112 115 119 123 127 131 Wide Bay/Burnett 293 298 303 308 314 319 325 331 337 343 349 Darling Downs 240 244 248 253 257 261 266 270 275 280 285 South West 26 26 26 26 26 27 27 27 27 28 28 Fitzroy 226 232 237 243 248 253 258 263 269 274 280 Central West 12 12 12 12 12 12 12 13 13 13 13 Mackay 179 184 189 194 200 205 210 215 220 225 230 Northern 234 240 245 250 255 260 265 271 276 281 286 Far West 277 281 286 291 295 300 304 308 313 317 322 North West 34 34 35 35 35 36 36 36 37 37 37 Queensland 4546 4639 4733 4828 4923 5018 5115 5211 5308 5406 5503

Table A.2 Share of regional population in total Queensland population – %

Fiscal years 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Brisbane 45.2 45.2 45.1 45.1 45.0 45.0 44.9 44.9 44.8 44.8 44.7 Gold Coast 11.8 11.9 11.9 12.0 12.0 12.1 12.1 12.1 12.1 12.1 12.1 Sunshine Coast 7.3 7.3 7.4 7.4 7.4 7.4 7.4 7.5 7.5 7.5 7.5 West Moreton 2.2 2.2 2.2 2.2 2.2 2.2 2.3 2.3 2.3 2.3 2.4 Wide Bay/Burnett 6.4 6.4 6.4 6.4 6.4 6.4 6.4 6.4 6.3 6.3 6.4 Darling Downs 5.3 5.3 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 South West 0.6 0.6 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 Fitzroy 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.1 5.1 5.1 5.1 Central West 0.3 0.3 0.3 0.3 0.2 0.2 0.2 0.2 0.2 0.2 0.2 Mackay 3.9 4.0 4.0 4.0 4.1 4.1 4.1 4.1 4.2 4.2 4.2 Northern 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 5.2 Far West 6.1 6.1 6.0 6.0 6.0 6.0 5.9 5.9 5.9 5.9 5.8 North West 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 Queensland 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

102

Table A.3(a) Total Queensland construction by region – share of residential activity in total regional activity (%)

Fiscal years 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Brisbane 57.4 57.0 55.5 49.9 46.5 41.8 36.9 40.5 37.8 37.5 41.1 48.6 50.3 51.8 50.5 45.1 41.7 42.0 42.3 42.2 Gold Coast 68.1 70.9 67.4 64.2 57.4 51.9 48.9 44.3 36.5 31.0 34.6 45.2 50.7 51.7 48.6 49.6 49.9 50.2 50.0 47.3 Sunshine Coast 70.0 70.9 72.0 63.2 62.0 59.2 56.9 54.4 41.8 37.8 50.9 49.9 48.9 51.3 51.4 56.3 56.4 55.8 55.6 53.1 West Moreton 59.0 62.6 63.7 53.3 53.7 50.5 39.9 51.3 46.4 43.5 52.7 59.9 57.5 52.5 52.0 52.9 60.0 61.0 59.0 54.4 Wide Bay/ Burnett 55.9 60.6 59.7 55.5 58.9 55.9 51.9 50.5 42.4 28.7 29.2 35.4 45.2 52.5 50.3 51.6 52.1 53.0 53.1 49.6 Darling Downs 42.7 44.7 40.3 42.2 47.7 46.6 42.9 46.5 43.0 26.0 16.4 16.1 23.2 33.4 35.8 39.7 38.1 36.2 36.2 33.8 South West 20.1 21.7 21.8 22.1 28.0 6.7 5.9 10.6 13.8 4.1 2.9 2.7 3.2 4.5 6.0 10.1 13.5 15.2 15.8 14.6 Fitzroy 36.7 39.7 32.2 28.1 30.7 29.5 18.6 13.1 9.9 6.4 6.3 7.0 7.2 8.1 11.4 14.9 15.9 16.4 16.6 15.1 Central West 15.0 11.9 11.6 12.7 14.3 15.0 12.4 13.8 10.8 12.4 9.3 11.0 13.0 16.8 25.1 40.2 44.5 44.8 42.5 40.9 Mackay 42.3 45.2 46.6 40.1 29.2 27.8 20.9 18.9 12.4 11.0 8.3 9.3 15.5 17.8 24.0 26.2 23.7 18.6 17.9 23.4 Northern 45.5 47.6 47.5 41.4 38.0 40.6 38.4 38.4 33.0 34.0 43.3 54.6 56.4 57.1 54.7 55.5 55.5 56.1 56.0 53.0 Far West 52.1 55.8 53.5 56.0 57.6 56.3 44.8 48.2 37.5 37.4 47.9 56.3 56.1 55.5 53.2 53.7 53.7 54.1 53.8 50.5 North West 10.4 7.6 8.3 8.8 9.5 13.2 9.7 9.9 8.2 5.2 3.3 5.6 7.5 9.6 13.0 21.9 20.9 16.5 18.9 21.3 Queensland 56.4 58.3 56.1 50.8 47.7 43.9 38.1 38.0 31.8 26.3 24.8 29.0 33.2 36.4 39.7 41.1 40.1 39.6 39.7 39.0

Table A.3(b) Total Queensland construction by region – share of non-residential activity in total regional activity (%)

Fiscal years 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Brisbane 16.6 18.6 17.4 20.1 20.8 22.5 21.6 18.7 22.1 19.9 18.5 18.3 15.4 17.1 16.2 14.0 14.2 14.7 14.5 14.8 Gold Coast 13.6 13.6 15.8 13.9 16.4 12.0 12.0 27.6 24.7 16.5 19.0 14.3 13.1 14.5 13.9 13.9 15.3 15.4 15.0 14.8 Sunshine Coast 11.3 12.5 9.5 13.8 12.1 9.3 9.8 9.9 7.3 10.6 10.2 23.6 21.0 21.5 16.7 10.8 12.6 14.1 13.8 13.5 West Moreton 6.5 6.8 5.5 13.4 13.6 10.0 32.2 18.0 9.9 7.0 5.0 4.8 7.1 11.4 14.2 11.0 11.5 13.7 13.2 12.8 Wide Bay/Burnett 9.4 8.6 9.9 13.5 9.6 9.0 8.9 16.8 11.2 4.7 3.2 3.1 4.2 7.2 9.6 10.0 11.7 13.8 13.8 13.8 Darling Downs 11.3 10.6 10.0 11.1 15.9 11.3 11.3 16.8 15.5 7.7 3.9 3.2 4.2 7.5 9.3 10.2 11.2 12.3 12.1 12.0 South West 4.7 2.7 4.0 11.8 7.9 2.2 1.3 7.8 11.4 2.5 2.4 1.5 1.4 1.7 1.5 2.3 3.4 4.0 4.0 3.8 Fitzroy 9.6 8.0 6.3 7.2 8.2 6.1 7.1 4.8 4.7 3.2 4.0 3.0 2.5 2.6 2.9 3.7 4.4 4.8 4.7 4.3 Central West 6.1 8.5 9.4 7.4 3.7 7.2 5.1 9.3 19.5 5.7 6.8 2.2 2.0 2.4 3.6 5.5 6.5 6.6 5.9 5.6 Mackay 12.0 10.0 9.8 12.6 9.2 8.2 9.2 9.5 12.2 4.6 4.3 3.2 4.6 5.7 7.5 8.2 8.4 6.9 6.6 9.4 Northern 15.8 13.4 13.7 11.7 17.9 12.9 13.2 21.2 15.3 23.9 23.8 18.7 15.3 16.4 15.9 15.9 17.2 16.6 16.1 16.1 Far West 14.4 15.2 17.6 12.8 12.0 15.0 23.3 16.3 18.9 21.7 15.4 13.7 10.9 12.8 14.4 14.9 16.2 15.6 15.1 14.9 North West 7.8 8.8 4.5 5.4 5.8 10.0 3.8 8.7 14.7 6.2 7.7 4.1 3.9 4.3 4.8 8.5 8.4 5.8 6.4 7.6 Queensland 14.1 14.9 14.4 15.7 16.3 15.6 16.1 17.0 16.8 12.6 10.6 10.0 9.5 11.1 11.8 11.5 12.3 12.6 12.3 12.6

103

Table A.3(c) Total Queensland construction by region – share of total engineering activity in total regional activity (%)


Table A.4 Share of public expenditures in regional total expenditures (%)


104

Table A.5(a) Queensland construction by region – share of public residential expenditure in total regional residential expenditure (%)


Table A.5(b) Queensland construction by region – share of public non-residential building expenditure in total regional non-residential building expenditure (%)

Fiscal years 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Brisbane 21 24 20 18 20 14 20 34 48 35 19 19 17 16 16 15 15 16 17 18 Gold Coast 12 11 10 7 17 9 6 54 50 24 35 17 16 13 11 10 9 7 9 10 Sunshine Coast 18 17 9 12 9 17 25 46 40 19 16 68 70 65 51 16 20 28 29 29 West Moreton 47 43 22 33 64 41 82 76 56 37 37 24 21 20 21 20 25 37 40 41 Wide Bay/Burnett 17 21 23 19 14 13 17 41 48 32 31 20 22 23 23 20 21 30 32 33 Darling Downs 18 14 28 26 9 25 7 35 30 18 11 9 13 18 22 19 21 31 32 33 South West 31 19 25 63 30 85 37 64 64 14 21 8 11 14 21 19 19 22 23 25 Fitzroy 32 13 8 19 22 16 7 39 43 21 14 8 10 13 19 17 17 20 21 22 Central West 43 34 21 29 55 45 53 54 91 72 87 70 58 32 9 9 9 10 10 10 Mackay 7 7 18 11 9 9 4 53 29 12 22 8 10 10 11 9 9 10 11 12 Northern 46 32 32 17 51 35 28 64 35 43 60 32 31 27 26 24 23 17 19 20 Far West 18 14 7 24 24 26 54 57 54 65 61 52 41 30 22 21 20 14 14 15 North West 57 70 39 18 30 29 11 55 51 54 78 50 46 33 21 25 20 6 6 6 Queensland 21 20 17 17 21 16 22 44 46 33 27 26 25 23 20 15 15 17 18 19

105

Table A.5(c) Queensland construction by region – share of public engineering in total regional engineering expenditure (including Commonwealth) – %


Table A.6 Queensland regional construction value of work done: chain volume measure (2009-10 $M) Private housing expenditure on new construction and alterations (excluding other work done) Fiscal years 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Brisbane 3904 4521 4776 4860 4785 4916 4944 4643 4405 4034 4041 3700 4459 4884 5433 6098 6663 6410 6607 6978 6571 Gold Coast 1530 1936 2437 2420 2270 2286 2113 1915 1672 1036 779 803 1266 1519 1747 1966 2129 2029 2080 2189 2043 Sunshine Coast 892 1136 1400 1435 1169 1133 1213 1105 918 776 642 627 837 964 1111 1274 1411 1370 1419 1502 1410 West Moreton 101 113 142 190 199 192 180 214 227 191 160 188 218 243 279 323 365 364 387 417 395 Wide Bay/ Burnett 342 419 553 681 747 818 805 676 605 468 366 344 450 519 590 633 663 625 639 669 595 Darling Downs 251 291 303 370 439 457 379 325 414 419 348 361 431 480 537 584 617 582 598 630 565 South West 8 11 10 12 15 19 18 17 18 14 20 34 37 39 45 53 62 61 63 66 62 Fitzroy 198 249 291 297 359 497 540 423 315 301 417 515 585 628 687 761 829 800 833 888 844 Central West 8 7 4 5 6 5 7 7 7 7 10 13 21 24 26 31 35 34 35 37 35 Mackay 199 225 253 351 468 525 563 442 477 389 377 452 480 507 548 572 587 541 540 552 480 Northern 404 390 366 497 593 634 706 682 530 400 406 423 522 593 665 726 772 730 747 784 716 Far West 318 357 442 555 654 702 843 624 447 330 359 383 486 560 629 686 727 686 698 726 647 North West 13 10 5 6 11 13 21 19 21 19 16 15 26 35 43 50 54 51 50 50 44 Queensland 8167 9666 10982 11677 11715 12198 12332 11091 10056 8386 7940 7859 9817 10995 12340 13756 14913 14284 14696 15489 14406

106

Table A.7 Queensland regional construction value of work done: chain volume measure (2009-10 $M) Public housing Fiscal years 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022


Table A.8 Queensland regional construction value of work done: chain volume measure (2009-10 $M) Non-residential building private Fiscal years 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022


107

Table A.9 Queensland regional construction value of work done: chain volume measure (2009-10 $M) Non-residential building public Fiscal years 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022


Table A.10 Queensland regional construction value of work done: chain volume measure (2009-10 $M) Private engineering Fiscal years 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022


108

Table A.11 Queensland regional construction value of work done: chain volume measure (2009-10 $M) Public engineering Fiscal years 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022


Table A.12 Queensland regional construction value of work done: chain volume measure (2009-10 $M) Non-residential building total Fiscal years 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022


109

Table A.13 Queensland regional construction value of work done: chain volume measure (2009-10 $M) Engineering total Fiscal years 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022


Table A.14 Queensland regional construction value of work done: chain volume measure (2009-10 $M) Total residential (excluding other work done) Fiscal years 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022


110

Table A.15 Queensland regional construction value of work done: chain volume measure (2009-10 $M) Total public sector engineering (including Commonwealth) Fiscal years 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022


Table A.16 Queensland regional construction value of work done: chain volume measure (2009-10 $M) Private residential (other work done) Fiscal years 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022


111

Table A.17 Queensland regional construction value of work done: chain volume measure (2009-10 $M) Total construction

Fiscal years 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022


Table A.18 Queensland regional construction value of work done: chain volume measure (2009-10 %) Total construction expenditure share of State total Fiscal years 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Brisbane 44.8 44.7 44.4 42.8 42.6 42.4 43.0 43.5 40.6 39.7 34.8 27.7 26.6 29.0 30.6 34.4 40.2 42.7 41.9 41.7 41.5 Gold Coast 14.6 15.4 16.7 16.2 14.7 15.2 14.6 13.5 14.4 11.6 9.8 9.1 9.2 9.7 10.5 12.1 12.3 11.8 11.6 11.6 12.0 Sunshine Coast 8.8 9.4 10.1 9.4 8.5 7.7 7.6 7.0 6.8 7.0 5.8 4.3 5.3 6.3 6.7 7.5 7.1 6.9 6.9 7.0 7.2 West Moreton 1.4 1.4 1.3 1.5 1.6 1.4 1.3 1.8 1.5 1.4 1.2 1.0 1.0 1.2 1.5 1.7 1.8 1.6 1.6 1.7 1.8 Wide Bay/ Burnett 4.7 4.8 4.9 5.3 5.5 5.1 4.9 4.4 4.4 4.3 4.6 4.1 4.1 3.7 3.5 3.9 3.8 3.6 3.5 3.4 3.5 Darling Downs 4.6 4.3 3.9 4.5 4.3 3.6 3.0 2.8 3.1 3.5 4.7 6.5 7.4 5.8 4.5 4.5 4.1 4.2 4.3 4.3 4.5 South West 0.7 0.6 0.5 0.5 0.4 0.4 1.4 1.3 0.8 0.6 2.1 3.4 3.8 3.7 3.0 2.6 1.7 1.3 1.1 1.1 1.2 Fitzroy 4.6 4.6 4.2 4.8 5.7 6.0 6.1 7.5 9.5 12.1 19.3 22.1 21.6 23.5 22.8 17.8 14.3 13.1 12.8 12.9 14.1 Central West 0.5 0.4 0.3 0.3 0.3 0.2 0.2 0.2 0.2 0.3 0.3 0.4 0.5 0.5 0.4 0.3 0.2 0.2 0.2 0.2 0.2 Mackay 3.4 3.4 3.2 3.5 4.5 6.3 6.4 6.8 8.4 10.1 9.3 14.1 13.7 9.1 8.5 6.6 6.1 6.4 7.9 8.1 5.8 Northern 5.6 5.3 4.7 5.2 6.0 6.3 5.8 5.6 5.4 4.8 3.7 2.9 2.8 3.1 3.4 3.8 3.9 3.7 3.6 3.7 3.8 Far West 5.2 5.0 5.0 5.4 5.1 4.8 5.1 4.9 4.0 3.9 3.2 2.7 2.7 3.1 3.5 3.9 3.9 3.8 3.7 3.7 3.7 North West 1.0 0.9 0.7 0.6 0.7 0.6 0.6 0.7 0.7 0.8 1.2 1.6 1.4 1.3 1.2 1.0 0.6 0.6 0.8 0.7 0.6 Queensland 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

112

Appendix B

Methodology – the formation of capacity in Queensland construction

113

Appendix B: Methodology – the formation of capacity in Queensland construction

The methodology outlined in this section deals with the old methodology of calculating the degree of excess capacity. However, as outlined in Section 4, this methodology has now been replaced with a more transparent methodology that can be updated quarterly. The new methodology series are ‘spliced onto’ the old methodology series to obtain a complete series. Hence this Appendix is still relevant.

From the perspective of the state the following factors have to be quantified to assure a realistic measure of effective capacity. These factors are:

(i) the under-utilisation of labour currently employed;

(ii) skilled labour resources not currently employed in the construction industry but who could be attracted back into the industry;

(iii) unemployed skilled construction workers in other states who would be attracted to Queensland; and

(iv) the increases in skill content of the construction workforce.

Each of these factors will be discussed in turn.

Under utilisation of labour currently employed

The status of employment in the construction industry by no means implies full utilisation of labour resources. When construction demand declines the fall in industry employment is proportionately less. This is because a fall in demand is, in part, met by reduced effective hours of, in part, those who maintain their employment status in the industry.

Conversely, when demand expands the core initial supply response is supplied by those already employed in the industry increasing their average hours of work.

State-wide unemployed resources

There are a number of responses of those who lose their employment in the construction sector. They are:

(i) travel interstate to obtain construction employment elsewhere;

(ii) obtain a temporary job outside the industry until construction employment prospects improve (taxi driving, etc.); and

(iii) leave the industry permanently to secure more stable employment.

Under (iii) labour resources are lost permanently to the industry. Under (i) they may or may not be lost permanently, while under (ii) the resources are available for immediate use.

114

Unutilised resources in other States

A proportion of unutilised resources in other states will be available for work in Queensland. The workers in this category are those whose:

• family circumstances;

• lifestyle; and

• character,

allow high mobility.

Occupational enhancement

Over the last decade the proportion of skilled workers to construction industry employment has grown significantly. By skilled workers is meant formally qualified architects, builders, engineers and tradesmen. The greater the skilled workforce available the greater will be industry productivity because:

(i) higher productivity is likely to be obtained from skilled personnel vis-à-vis unskilled personnel; and

(ii) the higher the productivity of unskilled personnel because of the availability of skilled personnel for informal on the job training.

Construction capacity: a state-wide assessment

In determining labour requirements for the construction industry it is important to distinguish between the types of construction activities. Residential and non-residential building generally involve more complex on-site construction thereby requiring more construction industry labour than in engineering construction for $ million of expenditure.

Hence, long run labour requirements are built up from the application of the formula:

n Ls = ∑ wi,s CEi,s (C.1) i=1

Where:

Ls = construction labour requirements in state s;

wi,s = employment required for $m of construction expenditure of category i;

CEi,s = construction expenditure of category i in state s.

The wi,s are estimated from construction industry survey data.

115

Long run labour supply

For Queensland, long run labour supply is estimated from:

(i) population in each region; and

(ii) number in each region with building sector qualifications/experience.

Labour shortage

Labour shortage is given by the difference between long run labour demand and long run labour supply.

Economic capacity

Economic capacity is that level of output where the long run labour supply is fully employed.

116

Appendix C

The forecast methodology

117

Appendix C: The forecast methodology

For dwellings and non-residential building the forecasting methodology considers approvals, commencements, value of work done and value yet to be done as separate explicit entities. The key behavioural equations are developed for approvals. Each approval equation is linked to its core drive macroeconomic variables, for example, in the case of hotels, the core drive macroeconomic variables in the equation are total visitor nights into Queensland and hotel bed occupancy rates.

For offices the key drive variable is employment in business services and government administration. For shops the key drive variable is the volume of retail trade. For education and health the key drive variables are the population in the relevant age ranges. The projections for these variables come out of the macroeconomic projections for Queensland.

Commencements are linked to approvals and value of work done is linked to commencements and value of work yet to be done at the beginning of the period. The value of work yet to be done at the end of the period is linked to the value of work done during the period and commencements.

For engineering a slightly different approach is taken. Because of the instability in engineering commencements an econometrical behavioural approach is not justified. The methodology involves looking at the spikes in commencements over the last 16 years and relating the frequency of spikes to general economic indicators such as Queensland gross regional product, Queensland employment and Queensland population.

The equation for the engineering component commencement data is a function of three components. An underlying base value reflecting maintenance and replacement expenditures. A seasonal component reflecting a bunching effect and the major spike component which may have a one to three duration between spikes. The spike component reflects major new initiatives.

The heavy engineering industry construction data is forecast exogenously on the basis of specific project information.

All drive variables are obtained from the Queensland economic projections. Therefore as the economic projections change so will the construction activity profile produced from the modelling.

The economic drive variables, of course, are not the only determinants of the projections. Judgements are made into likely public policy responses. For example, when there is a fall-off in private sector activity the government activity, within an appropriate lag, is allowed to increase so as to bring more stability to the projection profile.

Other factors which are important include the initial start conditions in terms of capacity in place. The higher the initial capacity in place for a given construction activity variable the lower will be the projection profile, everything else being equal.

118

LGA membership of dwelling construction zones by State

Table C.1 The LGA membership of construction zones by State

LGA share of state increase in required occupied housing

stock 2012-2022

New South Wales Auburn (A) The Hills Shire (A) Blacktown (C) Camden (A) Campbelltown (C) Fairfield (C) Holroyd (C) Liverpool Maitland Penrith (C) Wollondilly (A) Wollongong (C) Wyong (A) Rest of NSW Victoria Ballarat (C) Bass Coast (S) Baw Baw (S) Brimbank (C) Cardinia (S) Casey (C) Frankston (C) Greater Bendigo (C) Greater Dandenong (C) Greater Geelong (C) Hume (C) Melton (S) Whittlesea (C) Wyndham (C) Rest of Victoria Queensland Cairns (R) Gold Coast (C) Ipswich (C) Logan (C) Moreton Bay (R) Redland (C) Sunshine Coast (R) Rest of Queensland South Australia Gawler (T) Mount Barker (DC) Onkaparinga (C) Playford (C) Port Adelaide Enfield (C) Rest of South Australia Western Australia Armadale (C) Cockburn (C) Kwinana (T) Mandurah (C) Rockingham (C) Swan (C) Wanneroo (C) Rest of Western Australia

119

Appendix D

Total construction activity aggregates including estimates of other work done in residential activity and share tables

by expenditure component

120

Table D.1 Total residential construction including estimates of other work done (2009-10 $M)

Fiscal years 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022Brisbane 5877 6875 7156 7371 7486 7775 7674 7227 7156 6867 6969 6426 7180 7747 8389 9145 9770 9482 9685 10129 9576Gold Coast 2258 2815 3343 3398 3334 3450 3235 2974 2775 1939 1623 1778 2312 2605 2859 3099 3277 3153 3197 3325 3119Sunshine Coast 1421 1760 2029 2095 1880 1888 1930 1779 1616 1344 1173 1243 1503 1657 1820 1997 2144 2089 2135 2232 2104West Moreton 188 214 238 289 305 306 289 317 337 296 268 301 334 365 406 455 503 502 527 563 536Wide Bay/ Burnett 597 715 839 982 1078 1184 1166 1020 969 828 699 683 801 886 966 1017 1050 1004 1015 1050 955Darling Downs 421 490 491 563 645 681 596 531 633 688 651 604 658 719 787 844 883 847 864 903 826South West 26 31 29 31 35 40 40 36 38 38 47 56 58 63 70 81 92 93 96 101 97Fitzroy 370 447 476 485 561 722 767 630 545 552 661 786 839 895 968 1062 1140 1115 1155 1224 1169Central West 16 16 10 11 12 12 14 13 14 17 23 23 30 34 38 44 50 50 51 54 53Mackey 337 385 406 511 640 721 762 644 692 574 547 658 709 749 802 836 857 809 809 828 741Northern 618 643 633 768 877 943 1003 976 906 719 671 706 840 932 1018 1097 1149 1105 1126 1174 1089Far West 629 704 782 895 1011 1091 1220 984 833 664 646 728 853 938 1018 1087 1132 1085 1096 1130 1030North West 25 25 15 16 22 23 31 31 31 30 32 31 43 50 59 68 73 70 71 72 65Queensland 12781 15120 16447 17413 17886 18835 18727 17162 16545 14556 14011 14022 16160 17642 19201 20832 22120 21404 21827 22786 21359

Table D.2 Total Queensland construction including estimates of other residential work done (2009-10 $M)

Fiscal years 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022Brisbane 10544 11978 12549 13287 14989 16732 18373 19575 17680 18180 18596 15642 14787 15402 16181 18101 21651 22744 23071 23938 22710Gold Coast 3435 4134 4718 5040 5189 6010 6232 6082 6262 5318 5229 5132 5118 5143 5525 6374 6611 6318 6375 6654 6589Sunshine Coast 2078 2515 2863 2908 2976 3046 3260 3129 2972 3218 3101 2442 3010 3391 3546 3885 3811 3701 3828 4012 3963West Moreton 331 362 381 453 572 570 572 793 657 637 617 572 557 635 773 876 950 836 863 954 985Wide Bay/ Burnett 1113 1278 1385 1643 1941 2008 2087 1968 1917 1953 2431 2337 2263 1957 1838 2022 2037 1928 1915 1978 1925Darling Downs 1090 1146 1097 1398 1527 1427 1279 1239 1362 1600 2503 3677 4097 3100 2359 2356 2223 2226 2389 2498 2445South West 163 155 133 141 157 143 593 606 355 278 1134 1897 2138 1977 1564 1347 908 684 631 641 662Fitzroy 1078 1220 1198 1505 1998 2356 2598 3379 4147 5558 10284 12498 12034 12492 12020 9325 7665 7009 7062 7387 7724Central West 119 104 85 93 96 81 90 107 101 155 185 247 273 265 225 176 124 111 115 128 129Mackey 805 911 898 1098 1597 2468 2742 3082 3667 4620 4967 7948 7607 4817 4497 3486 3277 3410 4348 4629 3171Northern 1311 1414 1329 1617 2116 2484 2472 2542 2359 2180 1975 1630 1540 1652 1782 2005 2070 1991 2006 2098 2055Far West 1218 1352 1402 1672 1805 1895 2168 2196 1728 1771 1730 1518 1515 1673 1836 2041 2106 2022 2025 2100 2040North West 232 238 195 197 248 241 237 326 313 368 615 914 767 675 619 524 333 338 429 382 306Queensland 23517 26808 28233 31051 35211 39461 42703 45023 43522 45837 53367 56454 55707 53179 52765 52519 53766 53316 55057 57399 54703

121

Table D.3 Share of residential activity in total regional activity (%)

Fiscal years 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022Brisbane 55.7 57.4 57.0 55.5 49.9 46.5 41.8 36.9 40.5 37.8 37.5 41.1 48.6 50.3 51.8 50.5 45.1 41.7 42.0 42.3 42.2Gold Coast 65.7 68.1 70.9 67.4 64.2 57.4 51.9 48.9 44.3 36.5 31.0 34.6 45.2 50.7 51.7 48.6 49.6 49.9 50.2 50.0 47.3Sunshine Coast 68.3 70.0 70.9 72.0 63.2 62.0 59.2 56.9 54.4 41.8 37.8 50.9 49.9 48.9 51.3 51.4 56.3 56.4 55.8 55.6 53.1West Moreton 57.0 59.0 62.6 63.7 53.3 53.7 50.5 39.9 51.3 46.4 43.5 52.7 59.9 57.5 52.5 52.0 52.9 60.0 61.0 59.0 54.4Wide Bay/ Burnett 53.6 55.9 60.6 59.7 55.5 58.9 55.9 51.9 50.5 42.4 28.7 29.2 35.4 45.2 52.5 50.3 51.6 52.1 53.0 53.1 49.6Darling Downs 38.6 42.7 44.7 40.3 42.2 47.7 46.6 42.9 46.5 43.0 26.0 16.4 16.1 23.2 33.4 35.8 39.7 38.1 36.2 36.2 33.8South West 15.6 20.1 21.7 21.8 22.1 28.0 6.7 5.9 10.6 13.8 4.1 2.9 2.7 3.2 4.5 6.0 10.1 13.5 15.2 15.8 14.6Fitzroy 34.3 36.7 39.7 32.2 28.1 30.7 29.5 18.6 13.1 9.9 6.4 6.3 7.0 7.2 8.1 11.4 14.9 15.9 16.4 16.6 15.1Central West 13.4 15.0 11.9 11.6 12.7 14.3 15.0 12.4 13.8 10.8 12.4 9.3 11.0 13.0 16.8 25.1 40.2 44.5 44.8 42.5 40.9Mackey 41.8 42.3 45.2 46.6 40.1 29.2 27.8 20.9 18.9 12.4 11.0 8.3 9.3 15.5 17.8 24.0 26.2 23.7 18.6 17.9 23.4Northern 47.2 45.5 47.6 47.5 41.4 38.0 40.6 38.4 38.4 33.0 34.0 43.3 54.6 56.4 57.1 54.7 55.5 55.5 56.1 56.0 53.0Far West 51.6 52.1 55.8 53.5 56.0 57.6 56.3 44.8 48.2 37.5 37.4 47.9 56.3 56.1 55.5 53.2 53.7 53.7 54.1 53.8 50.5North West 10.9 10.4 7.6 8.3 8.8 9.5 13.2 9.7 9.9 8.2 5.2 3.3 5.6 7.5 9.6 13.0 21.9 20.9 16.5 18.9 21.3Queensland 54.3 56.4 58.3 56.1 50.8 47.7 43.9 38.1 38.0 31.8 26.3 24.8 29.0 33.2 36.4 39.7 41.1 40.1 39.6 39.7 39.0

Table D.4 Share of residential activity in total Queensland residential activity (%)


122

Table D.5 Share of total regional activity in total Queensland total activity (%)


Table D.6 Share of regional engineering activity in total Queensland regional activity (%)


123

Table D.7 Share of regional non-residential building activity in total regional total activity (%)


Table D.8 Share of regional public expenditure activity in total regional total activity (%)


124

Table D.9 Share of regional public housing expenditure activity in total regional housing activity (%)


Table D.10 Share of regional public non-residential building expenditure activity in total regional non-residential building activity (%)


125

Table D.11 Share of regional engineering expenditure activity in total regional engineering activity (%)


126

Appendix E

Additional quarterly tables

127

Table E.1 Private dwelling value of work done: new construction (including alterations and additions) – 2009-10 $ million

Brisbane Gold

coast Sunshine

Coast West

Moreton Wide Bay/

Burnett Darling Downs

South West Fitzroy

Central West Mackay Northern

Far North

North West Queensland

Queensland December 2011 = 100

2007.3 1159 522 277 40 194 97 4 130 2 136 154 202 5 2920 235 2007.4 1200 520 292 42 197 93 4 133 2 141 165 208 5 3002 242 2008.1 1284 542 320 47 208 96 4 140 2 148 187 220 6 3205 256 2008.2 1302 528 323 51 206 93 5 136 2 139 201 213 6 3206 248 2008.3 1365 552 341 58 209 95 5 135 2 133 216 209 6 3324 243 2008.4 1156 482 282 52 170 81 4 107 2 107 177 163 5 2788 190 2009.1 1112 462 258 53 157 78 4 97 2 105 158 139 5 2629 162 2009.2 1009 419 225 50 140 72 4 83 2 97 131 113 4 2350 132 2009.3 1046 434 226 53 145 81 4 81 2 107 128 109 5 2422 127 2009.4 1103 443 229 57 152 96 5 80 2 120 134 112 5 2537 131 2010.1 1057 387 216 55 146 106 5 72 2 118 127 107 5 2402 124 2010.2 1199 408 246 63 162 131 5 81 2 133 141 118 6 2694 138 2010.3 977 298 197 51 126 110 4 68 1 104 108 92 5 2142 107 2010.4 1025 273 204 51 124 112 3 75 2 103 105 87 5 2170 102 2011.1 1004 243 192 47 112 102 3 77 2 93 95 77 5 2051 90 2011.2 1028 222 183 42 106 95 4 81 2 89 92 74 4 2022 87 2011.3 1052 212 174 40 100 89 4 88 2 87 95 80 4 2028 93 2011.4 1018 197 161 37 92 85 4 96 2 87 98 86 4 1968 100 2012.1 1049 197 163 41 92 89 5 116 3 100 109 98 4 2066 114 2012. 922 173 144 41 82 85 6 118 2 103 104 95 3 1878 111

128

2 2012.3 885 168 142 45 79 86 7 124 3 111 103 94 3 1848 109 2012.4 874 175 145 47 81 87 8 126 3 113 102 91 3 1855 106 2013.1 936 209 160 48 88 92 9 131 4 115 107 96 4 1999 112 2013.2 1006 252 179 49 96 96 9 134 4 113 112 102 5 2156 119 2013.3 1060 283 194 52 104 102 9 140 5 117 121 112 5 2303 130 2013.4 1114 312 208 54 112 108 9 146 5 121 130 121 6 2445 141 2014.1 1128 327 213 55 115 109 9 147 6 120 133 124 7 2494 145 2014.2 1157 345 222 57 120 113 9 151 6 122 138 130 8 2576 151 Fiscal year 2008 4944 2113 1213 180 805 379 18 540 7 563 706 843 21 12332 2009 4643 1915 1105 214 676 325 17 423 7 442 682 624 19 11091 2010 4405 1672 918 227 605 414 18 315 7 477 530 447 21 10056 2011 4034 1036 776 191 468 419 14 301 7 389 400 330 19 8386 2012 4041 779 642 160 366 348 20 417 10 377 406 359 16 7940 2013 3700 803 627 188 344 361 34 515 13 452 423 383 15 7859 2014 4459 1266 837 218 450 431 37 585 21 480 522 486 26 9817

Table E.2 Private dwelling: other value of work done – 2009-10 $ million

Brisbane Gold

coast Sunshine

Coast West

Moreton Wide Bay/


South West Fitzroy


Far North



2007.3 666 280 179 27 87 54 5 52 2 48 70 91 2 1562 110 2007.4 625 263 167 26 82 50 4 49 1 45 66 86 2 1468 103 2008.1 679 286 182 28 90 55 5 54 2 50 72 94 2 1598 112 2008.2 678 286 181 28 90 55 5 54 2 50 73 94 2 1597 112 2008.3 759 320 203 31 102 61 5 61 2 57 82 106 3 1790 126 2008. 614 259 164 25 82 49 4 50 1 46 67 86 2 1450 102

129

4 2009.1 589 248 157 24 79 47 4 48 1 45 65 82 2 1391 98 2009.2 540 227 143 22 73 43 4 44 1 41 60 75 2 1275 90 2009.3 595 250 158 24 80 47 4 48 1 45 66 83 2 1405 99 2009.4 660 278 174 27 89 53 5 54 2 51 73 91 2 1557 110 2010.1 656 276 173 27 88 52 5 53 2 51 73 91 2 1550 109 2010.2 674 283 177 28 91 54 5 55 2 52 75 93 2 1590 112 2010.3 611 256 160 26 82 49 4 49 1 48 68 84 2 1442 101 2010.4 616 257 161 26 83 50 4 50 2 48 69 84 2 1452 102 2011.1 657 181 113 24 73 71 6 53 3 34 48 59 2 1324 93 2011.2 741 184 115 26 80 84 7 60 3 35 49 60 2 1446 102 2011.3 789 187 118 27 83 90 8 64 4 36 50 61 2 1520 107 2011.4 701 195 123 26 79 75 7 57 3 38 53 64 2 1421 100 2012.1 702 224 142 27 84 69 6 57 2 44 61 74 2 1493 105 2012.2 679 229 145 27 83 64 6 55 2 45 63 75 2 1474 104 2012.3 707 238 151 28 86 67 6 58 2 48 66 79 2 1538 108 2012.4 670 237 150 27 83 61 5 55 2 48 66 78 2 1486 105 2013.1 669 250 159 28 85 58 5 55 2 51 70 83 2 1518 107 2013.2 640 243 155 27 82 55 5 53 2 50 68 81 2 1463 103 2013.3 648 253 162 27 84 54 5 54 2 53 71 85 2 1500 106 2013.4 663 259 165 28 86 55 5 56 2 54 73 86 2 1536 108 2014.1 676 263 168 29 87 56 5 58 2 56 75 88 2 1564 110 2014. 685 265 169 29 88 57 6 59 2 57 76 89 2 1584 111

130

2 Fiscal year 2008 2648 1116 709 108 350 214 19 209 6 193 280 365 9 6226 2009 2502 1054 666 102 336 200 18 203 6 189 273 349 8 5906 2010 2585 1087 682 107 348 206 18 210 6 199 287 358 9 6101 2011 2625 877 549 101 319 254 23 212 9 166 234 287 7 5663 2012 2871 835 527 107 329 298 26 232 11 163 227 274 7 5908 2013 2687 968 615 109 337 240 22 222 8 197 269 321 9 6004 2014 2671 1040 663 114 346 222 21 227 8 220 295 348 10 6184

Table E.3 Private dwelling: total value of work done – 2009-10 $ million

Brisbane Gold

coast Sunshine

Coast West

Moreton Wide Bay/


South West Fitzroy


Far North



2007.3 1824 802 456 68 281 150 9 182 3 183 224 293 7 4482 132 2007.4 1825 783 459 67 279 144 9 183 3 186 231 294 7 4470 132 2008.1 1963 829 502 75 298 150 9 194 3 198 259 314 8 4803 142 2008.2 1980 814 505 79 297 148 9 191 3 189 273 307 8 4803 142 2008.3 2124 871 543 89 310 156 10 196 3 190 298 315 8 5114 151 2008.4 1770 741 446 77 253 130 8 157 3 153 244 249 7 4238 125 2009.1 1701 710 414 77 237 125 8 145 3 149 222 222 7 4020 119 2009.2 1549 646 368 72 212 115 8 127 3 138 190 189 6 3625 107 2009.3 1641 685 384 77 225 128 9 129 3 153 194 192 7 3827 113 2009.4 1762 720 403 84 241 149 10 134 4 170 207 204 7 4094 121 2010.1 1714 663 389 82 235 158 9 126 3 168 200 198 7 3952 117 2010.2 1873 690 423 91 253 185 10 136 3 185 216 211 8 4284 126 2010.3 1589 554 357 77 209 160 8 118 3 152 176 175 7 3584 106 2010. 1641 530 365 77 207 162 8 125 3 152 173 171 7 3622 107

131

4 2011.1 1661 423 305 70 186 173 10 130 5 127 143 136 6 3375 100 2011.2 1768 406 299 68 185 178 11 140 5 124 141 134 6 3468 102 2011.3 1840 400 292 67 183 180 12 152 6 123 146 141 6 3548 105 2011.4 1719 393 285 63 171 160 11 152 5 125 150 150 6 3389 100 2012.1 1751 421 304 68 176 158 11 172 5 144 170 172 6 3559 105 2012.2 1601 401 289 68 164 149 12 173 5 148 166 170 5 3352 99 2012.3 1592 406 293 72 165 152 13 181 5 158 168 172 5 3385 100 2012.4 1544 412 296 74 164 148 14 181 5 161 168 170 5 3341 99 2013.1 1606 459 319 76 173 150 14 187 6 167 176 179 6 3518 104 2013.2 1645 495 334 76 178 150 14 187 6 163 180 183 7 3619 107 2013.3 1708 536 355 79 188 155 14 195 6 169 192 196 8 3803 112 2013.4 1777 570 372 82 198 163 14 203 7 175 203 207 9 3981 117 2014.1 1803 589 381 84 202 166 15 205 8 176 208 212 9 4058 120 2014.2 1842 610 391 86 208 170 15 209 8 179 214 218 10 4160 123 Fiscal year 2008 7592 3229 1922 289 1156 592 36 749 13 756 986 1208 30 18558 2009 7145 2968 1772 316 1012 526 34 625 13 630 955 974 28 16997 2010 6990 2759 1600 334 953 620 37 524 13 676 816 804 30 16157 2011 6659 1914 1326 293 787 673 37 513 16 555 634 617 26 14049 2012 6911 1615 1170 266 694 647 46 649 21 540 633 633 23 13848 2013 6387 1772 1242 297 680 601 56 737 22 649 693 704 23 13863 2014 7130 2306 1500 331 796 654 58 812 29 699 816 834 36 16002

Table E.4 Private non-residential building value of work done – 2009-10 $ million Brisbane Gold Sunshine West Wide Bay/ Darling South Fitzroy Central Mackay Northern Far North Queensland Queensland

December

132

coast Coast Moreton Burnett Downs West West North West 2011 = 100

2007.3 847 174 63 7 34 28 1 42 1 55 51 41 4 1347 120 2007.4 870 159 63 8 31 25 0 33 1 46 48 38 5 1326 118 2008.1 921 173 68 9 47 30 0 28 1 50 51 75 5 1458 129 2008.2 927 176 58 10 53 26 1 29 1 52 58 87 4 1480 131 2008.3 979 180 53 10 48 25 1 52 0 71 59 81 2 1561 139 2008.4 913 164 63 12 38 28 1 68 0 69 65 61 3 1487 132 2009.1 812 161 63 13 32 34 1 60 1 69 66 48 3 1362 121 2009.2 685 178 50 10 27 43 2 42 1 64 53 46 3 1203 107 2009.3 546 187 40 8 31 41 2 31 1 45 45 34 2 1012 90 2009.4 522 210 42 8 55 41 2 28 1 38 47 29 2 1024 91 2010.1 548 211 43 7 61 36 3 25 2 38 46 30 4 1052 93 2010.2 567 188 36 6 45 29 4 37 1 46 43 28 5 1034 92 2010.3 498 167 38 5 30 35 2 49 1 128 44 28 4 1029 91 2010.4 465 156 42 7 27 44 1 43 1 140 40 28 7 1001 89 2011.1 462 149 35 8 28 46 1 29 1 83 57 43 8 950 84 2011.2 652 180 27 8 29 49 7 28 1 51 77 54 8 1170 104 2011.3 658 161 41 6 23 45 8 31 1 33 54 35 5 1102 98 2011.4 627 168 56 7 21 40 5 40 1 43 80 35 3 1127 100 2012.1 561 162 84 8 19 37 4 77 1 55 81 34 4 1127 100 2012.2 561 163 84 7 15 34 7 113 1 70 56 29 5 1143 101 2012.3 562 150 52 4 11 31 9 120 1 71 31 21 4 1068 95

133

2012.4 607 157 47 4 13 35 10 118 1 70 31 21 3 1116 99 2013.1 589 162 52 5 13 32 9 101 0 65 43 24 4 1097 97 2013.2 577 163 58 5 14 31 8 90 0 61 49 25 4 1086 96 2013.3 556 157 58 5 14 30 8 84 0 58 50 25 4 1048 93 2013.4 546 153 56 5 14 30 7 82 0 56 49 25 4 1027 91 2014.1 540 151 56 5 14 30 7 81 0 55 48 25 4 1016 90 2014.2 539 150 55 5 14 30 7 80 0 55 48 25 4 1013 90 Fiscal year 2008 3565 682 251 34 164 108 2 132 4 203 207 242 17 5610 2009 3390 683 229 45 145 130 5 222 3 273 242 236 11 5613 2010 2182 797 160 28 192 148 10 121 4 166 181 120 12 4123 2011 2077 651 142 28 115 174 12 150 3 401 218 153 27 4150 2012 2407 654 265 27 78 157 24 262 3 201 271 132 17 4498 2013 2335 631 208 18 51 128 37 430 2 266 154 91 15 4367 2014 2181 612 225 20 55 120 29 326 2 223 195 100 16 4104

Table E.5 Public non-residential building value of work done – 2009-10 $ million

Brisbane Gold

coast Sunshine

Coast West

Moreton Wide Bay/


South West Fitzroy


Far North



2007.3 180 21 12 12 6 12 1 10 0 3 21 16 2 296 49 2007.4 181 20 15 9 5 13 5 6 0 6 13 34 3 311 52 2008.1 91 11 12 2 6 6 3 4 1 6 29 20 1 191 32 2008.2 118 11 12 1 8 5 2 6 1 6 50 15 1 234 39 2008.3 128 10 7 0 6 4 1 5 1 4 47 11 0 225 37 2008.4 169 7 14 42 6 2 0 3 0 2 17 58 0 321 53 2009.1 273 12 24 92 10 1 1 4 1 1 12 114 0 544 90

134

2009.2 277 16 32 78 7 2 1 4 1 3 17 93 0 531 88 2009.3 345 82 45 46 21 8 3 16 1 10 66 60 1 704 117 2009.4 329 106 42 20 43 22 4 25 0 19 109 40 3 762 126 2010.1 241 318 28 13 38 25 5 17 1 68 83 32 4 874 145 2010.2 216 424 20 11 30 25 6 18 3 87 60 28 7 937 155 2010.3 331 414 24 13 27 27 8 27 5 83 43 30 12 1043 173 2010.4 494 196 29 10 28 20 7 27 6 47 30 29 9 932 155 2011.1 521 29 25 8 33 18 4 37 10 23 29 29 5 770 128 2011.2 603 25 16 4 17 9 1 24 7 11 13 94 2 825 137 2011.3 472 37 13 3 7 5 0 11 3 5 5 91 2 654 109 2011.4 400 46 18 4 7 9 0 15 1 5 13 78 5 603 100 2012.1 266 45 18 4 10 11 1 19 1 6 65 46 6 500 83 2012.2 164 83 13 5 13 9 2 24 3 12 118 28 7 481 80 2012.3 115 121 9 4 9 6 4 25 5 24 106 30 15 473 78 2012.4 119 115 8 3 6 3 3 22 5 27 67 37 20 434 72 2013.1 166 70 9 2 4 4 2 15 3 16 34 41 13 380 63 2013.2 167 40 8 2 4 4 1 10 2 8 27 36 7 313 52 2013.3 150 32 94 2 4 3 1 8 1 5 24 31 4 358 59 2013.4 136 31 119 2 3 3 1 7 1 5 23 28 4 364 60 2014.1 131 31 119 2 4 3 1 8 1 5 24 27 4 358 59 2014.2 129 33 119 2 4 3 1 8 1 6 25 27 4 360 60 Fiscal year

135

2008 568 64 52 23 25 36 11 26 3 21 113 84 7 1032 2009 847 45 77 211 30 10 3 17 3 10 93 276 1 1622 2010 1131 930 135 90 131 81 18 77 5 184 319 161 15 3276 2011 1948 663 94 35 105 74 20 114 27 163 116 182 28 3570 2012 1303 211 62 16 37 35 4 69 8 28 202 243 21 2238 2013 567 347 34 11 24 17 10 71 15 75 234 143 55 1600 2014 546 127 450 6 14 13 3 31 4 21 96 112 16 1440

Table E.6 Total non-residential building value of work done – 2009-10 $ million

Brisbane Gold

coast Sunshine

Coast West

Moreton Wide Bay/


South West Fitzroy


Far North



2007.3 1027 195 75 18 40 40 1 52 1 58 72 57 6 1643 95 2007.4 1051 179 78 17 36 38 5 39 1 52 60 73 7 1637 95 2008.1 1012 185 80 11 52 35 4 32 2 55 80 95 6 1649 95 2008.2 1045 187 69 11 60 31 3 35 2 58 107 102 4 1714 99 2008.3 1107 190 60 10 54 30 2 57 1 75 106 92 3 1787 103 2008.4 1083 172 77 53 44 30 2 72 1 71 82 119 3 1808 105 2009.1 1085 173 87 104 41 36 2 64 2 70 78 161 3 1906 110 2009.2 962 194 82 88 35 45 3 46 2 67 70 139 3 1735 100 2009.3 891 269 84 54 52 49 5 47 1 55 111 94 3 1716 99 2009.4 851 317 84 28 98 63 6 53 1 57 156 69 5 1786 103 2010.1 789 529 70 20 98 62 8 43 3 106 129 62 7 1926 111 2010.2 783 613 57 17 75 54 9 55 4 133 103 56 12 1971 114 2010.3 828 581 63 18 57 62 11 76 6 210 87 58 16 2072 120 2010.4 959 351 71 17 55 64 9 69 6 187 70 57 17 1933 112 2011.1 984 177 59 16 61 64 5 66 10 106 86 72 12 1720 99

136

2011.2 1255 204 43 12 46 58 8 52 7 62 90 148 9 1994 115 2011.3 1130 198 53 10 31 50 8 42 4 38 60 126 7 1756 102 2011.4 1027 214 75 10 28 50 5 55 2 48 94 113 8 1730 100 2012.1 827 207 103 12 29 49 5 97 2 61 146 80 11 1626 94 2012.2 725 246 97 12 27 43 9 137 3 82 174 57 12 1624 94 2012.3 678 271 61 8 21 37 13 146 5 94 137 51 19 1541 89 2012.4 725 272 55 7 18 38 13 140 6 97 98 58 23 1550 90 2013.1 755 232 61 7 17 35 11 115 4 81 77 65 17 1477 85 2013.2 744 203 66 7 18 34 9 100 2 69 76 61 11 1399 81 2013.3 706 190 152 7 17 33 8 91 1 63 74 56 8 1407 81 2013.4 682 184 175 7 17 33 8 89 1 61 72 53 8 1391 80 2014.1 671 182 174 7 17 33 8 88 2 60 72 52 8 1374 79 2014.2 668 182 174 7 18 34 8 88 2 60 73 51 8 1372 79 Fiscal year 2008 4134 746 303 57 189 144 13 158 6 224 320 326 24 6643 2009 4237 728 306 255 174 141 8 239 5 283 336 512 12 7235 2010 3313 1727 295 119 323 228 28 198 9 350 500 281 27 7399 2011 4025 1314 236 63 219 249 32 264 30 565 334 335 54 7719 2012 3709 865 327 43 115 192 28 331 11 228 473 375 38 6736 2013 2902 977 242 29 75 145 46 500 17 341 388 235 70 5968 2014 2727 739 675 27 70 132 32 357 6 244 291 212 32 5544

Table E.7 Non-Queensland Government engineering value of work done – 2009-10 $ million

Brisbane Gold

coast Sunshine

Coast West

Moreton Wide Bay/


South West Fitzroy


Far North



2007.3 456 110 28 28 83 53 13 75 11 64 49 60 23 1052 78

137

2007.4 511 121 36 30 94 53 13 77 12 71 52 64 24 1159 85 2008.1 484 114 39 29 91 43 12 70 11 78 49 60 20 1099 81 2008.2 496 118 46 30 97 39 12 69 10 94 49 62 18 1138 84 2008.3 441 106 46 27 90 30 10 60 9 98 43 55 14 1029 76 2008.4 468 115 56 29 100 29 10 62 9 124 46 59 13 1121 83 2009.1 438 100 51 28 89 29 10 61 8 112 45 52 11 1034 76 2009.2 549 116 63 37 108 40 14 82 11 135 59 61 12 1286 95 2009.3 502 99 57 36 95 41 13 80 10 119 57 53 9 1170 86 2009.4 501 92 57 38 92 45 14 85 10 115 60 50 8 1168 86 2010.1 467 82 53 32 88 45 11 83 8 105 54 44 9 1083 80 2010.2 543 92 63 34 105 55 11 102 9 119 60 48 13 1256 93 2010.3 446 73 53 26 90 48 8 89 6 96 48 37 13 1033 76 2010.4 506 80 61 27 106 59 7 107 6 107 53 40 18 1178 87 2011.1 504 82 59 25 104 58 10 101 7 86 54 45 17 1151 85 2011.2 594 100 68 27 122 69 18 115 9 83 67 59 18 1349 99 2011.3 461 82 52 20 95 55 20 87 8 54 54 52 14 1054 78 2011.4 582 110 66 24 123 71 38 109 11 57 73 76 16 1357 100 2012.1 529 94 60 23 110 63 24 100 9 63 63 60 16 1215 90 2012.2 520 94 59 22 109 62 27 98 9 58 63 62 15 1198 88 2012.3 553 102 57 25 117 65 27 106 9 45 66 66 16 1254 92 2012.4 550 104 54 26 120 66 26 119 9 38 66 67 16 1260 93 2013.1 556 108 53 27 124 68 27 135 9 36 68 69 17 1296 95

138

2013.2 549 109 51 27 125 67 26 145 9 45 67 69 17 1306 96 2013.3 575 116 52 31 137 72 29 168 10 56 70 73 18 1406 104 2013.4 597 120 53 34 146 75 31 180 11 64 72 75 19 1475 109 2014.1 624 127 53 39 150 78 33 184 12 59 73 76 20 1527 112 2014.2 655 132 54 45 152 82 35 186 13 53 75 78 21 1583 117 Fiscal year 2008 1947 464 150 116 365 189 49 290 45 306 199 246 84 4448 2009 1896 437 216 121 387 129 44 265 37 469 193 227 49 4470 2010 2013 365 230 141 380 186 50 350 38 458 230 196 40 4677 2011 2049 335 240 104 420 234 43 413 29 373 222 181 67 4711 2012 2093 380 237 90 437 251 110 394 38 231 253 250 61 4824 2013 2208 422 215 105 486 265 106 504 36 164 267 271 66 5116 2014 2451 495 213 149 584 306 127 718 45 233 290 302 77 5990

Table E.8 Queensland Government engineering value of work done – 2009-10 $ million

Brisbane Gold

coast Sunshine

Coast West

Moreton Wide Bay/


South West Fitzroy


Far North



2007.3 959 376 213 26 79 72 95 337 4 272 218 77 22 2750 38 2007.4 1104 406 228 28 90 75 129 352 4 364 237 86 23 3127 43 2008.1 1280 461 235 32 107 99 130 333 8 347 256 107 27 3422 47 2008.2 1274 546 201 24 92 104 136 362 9 467 239 106 26 3585 49 2008.3 1469 569 225 31 119 123 129 377 14 414 259 129 54 3914 54 2008.4 1789 509 236 33 124 130 140 422 16 280 307 139 66 4190 57 2009.1 1547 444 187 23 89 102 126 670 12 469 255 112 57 4094 56 2009.2 1409 422 180 14 53 84 122 777 9 524 216 93 55 3958 54 2009.3 1435 386 196 15 68 88 117 751 11 511 207 106 56 3948 54

139

2009.4 1321 342 180 11 55 76 93 754 8 525 170 96 54 3685 50 2010.1 1330 373 203 20 75 86 16 775 12 526 191 115 56 3778 52 2010.2 1110 293 252 16 47 64 14 773 10 605 155 101 49 3490 48 2010.3 1306 334 295 28 83 70 21 775 15 650 193 127 53 3952 54 2010.4 1367 360 302 32 80 64 24 817 17 693 207 136 47 4145 57 2011.1 1240 436 356 44 120 92 27 1318 21 756 259 163 41 4874 67 2011.2 1324 600 445 71 202 203 92 1420 26 1009 246 164 77 5878 81 2011.3 1452 583 423 58 253 253 127 1748 26 875 182 131 95 6207 85 2011.4 1495 602 409 53 292 314 192 2645 25 892 150 112 119 7299 100 2012.1 1606 642 298 57 344 382 300 2006 31 934 145 125 137 7006 96 2012.2 1273 534 234 48 292 460 330 2498 32 1260 101 91 133 7286 100 2012.3 1281 518 191 39 282 579 373 2672 37 1538 85 81 147 7822 107 2012.4 986 475 177 33 261 624 392 2863 40 1559 66 69 192 7738 106 2013.1 962 498 190 34 281 720 452 2608 46 1809 64 72 211 7946 109 2013.2 880 465 177 30 270 739 472 2565 48 1880 55 64 197 7842 107 2013.3 713 436 157 21 265 789 517 2639 52 1954 46 55 187 7830 107 2013.4 568 381 137 13 206 721 477 2419 47 1692 27 36 155 6879 94 2014.1 585 392 144 10 182 756 475 2444 48 1538 25 32 145 6776 93 2014.2 583 368 148 5 156 736 451 2619 45 1238 23 28 129 6529 89 Fiscal year 2008 4617 1788 877 110 368 350 491 1384 25 1450 950 376 98 12885 2009 6215 1943 828 100 386 439 518 2246 51 1687 1038 472 233 16157 2010 5197 1394 831 61 245 315 240 3054 40 2166 724 418 214 14900 2011 5238 1730 1398 174 485 430 164 4330 79 3108 906 591 217 18850

140

2012 5825 2361 1364 216 1180 1409 950 8898 113 3961 577 458 484 27797 2013 4109 1956 735 137 1093 2662 1689 10708 171 6785 269 286 747 31348 2014 2448 1577 585 48 809 3001 1921 10121 192 6422 122 152 616 28014

Table E.9 Total engineering value of work done – 2009-10 $ million

Brisbane Gold

coast Sunshine

Coast West

Moreton Wide Bay/


South West Fitzroy


Far North



2007.3 1415 486 242 54 162 126 108 411 16 335 267 137 45 3803 44 2007.4 1615 527 265 58 184 128 142 429 17 435 289 150 47 4286 50 2008.1 1764 575 275 60 198 142 142 403 19 424 305 167 47 4521 52 2008.2 1770 664 247 54 188 143 148 431 19 561 288 167 44 4723 55 2008.3 1910 675 272 57 209 153 139 437 23 513 302 184 68 4943 57 2008.4 2257 624 292 61 224 158 151 484 25 404 353 198 79 5311 61 2009.1 1985 544 238 51 179 131 136 731 21 580 300 163 68 5128 59 2009.2 1958 537 243 51 161 125 136 859 20 658 275 154 67 5244 61 2009.3 1937 485 253 51 163 129 130 831 21 630 264 159 65 5118 59 2009.4 1822 434 237 49 147 122 108 839 18 640 230 146 62 4853 56 2010.1 1797 456 256 52 163 131 27 859 20 630 245 159 65 4861 56 2010.2 1654 385 315 50 152 119 25 876 19 724 216 149 62 4746 55 2010.3 1752 407 348 54 173 119 29 864 22 746 241 165 66 4986 58 2010.4 1873 440 363 58 185 123 31 924 23 800 260 177 65 5323 61 2011.1 1744 518 415 68 224 150 38 1420 28 842 314 208 57 6026 70 2011.2 1918 700 512 98 323 272 110 1535 35 1092 313 223 96 7227 83 2011.3 1913 665 475 78 348 308 147 1835 34 928 236 183 109 7260 84

141

2011.4 2077 711 475 77 415 385 230 2754 36 949 224 187 136 8656 100 2012.1 2135 736 358 80 453 445 325 2107 40 997 207 185 153 8221 95 2012.2 1793 628 293 71 401 523 357 2596 41 1317 163 153 148 8484 98 2012.3 1834 620 248 64 399 644 400 2778 46 1582 151 147 163 9076 105 2012.4 1536 579 232 59 381 690 419 2982 49 1597 132 136 209 8998 104 2013.1 1518 605 243 61 405 787 479 2743 55 1845 132 141 228 9242 107 2013.2 1429 574 227 57 395 807 498 2709 57 1925 122 133 214 9148 106 2013.3 1288 552 209 51 402 861 546 2807 61 2010 116 128 205 9237 107 2013.4 1165 501 190 47 352 795 508 2599 57 1756 99 111 174 8353 97 2014.1 1209 519 197 49 331 834 508 2628 60 1597 98 108 165 8303 96 2014.2 1238 501 202 50 307 817 487 2805 58 1291 98 107 150 8111 94 Fiscal year 2008 6564 2252 1027 226 732 539 540 1674 70 1756 1149 622 182 17333 2009 8111 2380 1044 221 773 567 562 2511 88 2156 1231 700 282 20626 2010 7210 1759 1061 202 625 501 290 3404 78 2625 954 614 255 19578 2011 7287 2065 1638 278 906 663 208 4743 108 3481 1127 772 284 23561 2012 7918 2741 1601 305 1617 1660 1059 9292 151 4192 831 709 545 32621 2013 6317 2377 950 242 1579 2928 1795 11212 207 6949 537 557 813 36464 2014 4899 2072 798 197 1393 3307 2048 10839 237 6654 412 454 693 34004

Table E.10 Public dwelling value of work done – 2009-10 $ million

Brisbane Gold

coast Sunshine

Coast West

Moreton Wide Bay/


South West Fitzroy


Far North



2007.3 16 2 1 0 3 0 1 5 0 2 4 4 0 38 87 2007.4 26 3 2 0 4 1 1 7 0 1 6 4 0 55 127 2008.1 20 1 2 0 2 1 1 4 0 1 3 3 0 39 89

142

2008.2 21 1 2 0 1 1 1 2 0 2 3 2 1 38 86 2008.3 20 0 2 0 1 1 1 0 0 3 2 3 1 36 82 2008.4 22 1 1 0 1 2 1 1 0 4 6 3 1 42 96 2009.1 18 2 1 0 3 1 0 1 0 3 6 2 1 38 88 2009.2 22 3 3 0 3 2 0 2 0 3 8 3 0 49 113 2009.3 27 5 4 1 4 2 0 5 0 0 8 4 1 62 142 2009.4 38 2 4 1 1 2 0 5 0 5 15 5 0 79 180 2010.1 37 4 3 1 4 3 0 4 0 5 26 5 0 92 210 2010.2 65 5 5 1 6 6 0 7 0 6 40 15 0 156 358 2010.3 65 11 7 1 7 8 0 13 0 2 42 17 1 174 400 2010.4 66 7 5 1 14 4 0 12 0 5 21 14 1 149 343 2011.1 47 5 4 1 12 3 0 10 0 7 12 8 1 110 252 2011.2 30 2 2 1 9 1 0 5 0 5 10 7 2 74 170 2011.3 14 2 1 1 2 1 0 1 0 4 11 5 2 46 106 2011.4 15 3 1 0 2 1 0 1 0 1 13 4 3 44 100 2012.1 13 2 1 0 0 1 0 2 1 1 6 2 1 31 71 2012.2 15 2 0 1 0 1 0 8 1 2 8 2 2 42 96 2012.3 12 2 0 1 1 1 0 13 1 2 3 4 1 41 94 2012.4 8 1 0 1 1 1 0 15 0 2 2 7 2 39 90 2013.1 8 2 0 1 1 1 0 12 0 2 3 6 2 38 88 2013.2 10 1 0 1 1 1 0 9 0 3 5 6 2 40 92 2013.3 11 1 1 1 1 1 0 8 0 3 6 5 2 40 91

143

2013.4 12 1 1 1 1 1 0 7 0 2 6 5 2 39 90 2014.1 13 2 1 1 1 1 0 6 0 2 6 5 2 39 90 2014.2 14 2 1 1 1 1 0 6 0 2 7 4 1 40 91 Fiscal year 2008 83 6 8 0 10 4 4 17 1 6 17 13 1 169 2009 82 6 8 1 9 6 1 4 0 13 21 11 4 165 2010 166 16 16 3 16 13 1 21 1 16 90 29 1 388 2011 208 25 19 3 41 16 1 39 1 19 85 46 4 507 2012 58 9 3 2 5 4 0 12 2 7 38 14 9 162 2013 39 6 1 4 3 4 0 49 1 9 13 23 7 159 2014 50 6 3 2 5 4 0 27 1 10 24 19 7 158

Table E.11 Total construction: value of work done – 2009-10 $ million

Brisbane Gold

coast Sunshine

Coast West

Moreton Wide Bay/


South West Fitzroy


Far North



2007.3 4282 1485 774 140 486 316 119 651 20 579 567 490 58 9965 72 2007.4 4516 1492 804 142 503 311 157 657 21 675 586 521 62 10448 76 2008.1 4758 1589 860 146 551 329 156 633 25 679 647 578 61 11012 80 2008.2 4816 1666 823 143 546 323 161 658 25 810 672 579 57 11278 82 2008.3 5162 1737 877 156 574 340 152 691 28 780 707 593 80 11879 86 2008.4 5132 1537 815 192 522 320 161 714 29 633 685 568 90 11399 82 2009.1 4790 1428 741 233 459 293 146 941 25 803 607 549 79 11092 80 2009.2 4492 1380 696 211 411 286 146 1034 25 867 543 485 76 10653 77 2009.3 4495 1444 725 183 445 308 144 1013 25 838 578 449 75 10722 78 2009.4 4473 1473 727 161 487 335 123 1030 23 872 608 424 75 10812 78 2010.1 4336 1652 718 155 499 354 44 1031 26 909 599 424 80 10830 78

144

2010.2 4375 1693 801 158 486 364 44 1073 27 1047 575 431 83 11157 81 2010.3 4234 1552 775 149 445 348 48 1070 31 1111 547 415 90 10816 78 2010.4 4539 1328 804 153 462 354 48 1130 33 1143 524 420 89 11027 80 2011.1 4435 1124 783 156 482 389 53 1626 43 1083 555 424 77 11230 81 2011.2 4972 1313 856 179 564 510 129 1732 48 1283 553 511 112 12763 92 2011.3 4898 1264 821 156 564 538 168 2031 44 1093 453 456 124 12610 91 2011.4 4839 1321 835 151 616 595 246 2962 43 1122 481 455 153 13818 100 2012.1 4726 1366 765 159 658 653 341 2378 48 1203 530 438 170 13437 97 2012.2 4134 1278 679 151 593 716 378 2914 50 1549 511 382 168 13502 98 2012.3 4116 1299 602 146 586 834 426 3118 57 1837 460 375 188 14043 102 2012.4 3813 1263 583 141 563 876 446 3318 60 1856 399 370 239 13928 101 2013.1 3888 1298 623 145 596 973 504 3057 65 2095 388 391 253 14275 103 2013.2 3829 1272 628 140 592 993 521 3005 65 2160 383 383 234 14206 103 2013.3 3712 1280 717 138 609 1051 568 3101 70 2245 388 386 223 14486 105 2013.4 3637 1257 738 137 568 992 530 2898 66 1995 380 376 192 13764 100 2014.1 3696 1292 753 140 552 1033 531 2928 69 1836 384 377 183 13774 100 2014.2 3761 1294 768 143 534 1022 509 3109 68 1532 392 381 169 13683 99 Fiscal year 2008 18373 6232 3260 572 2087 1279 593 2598 90 2742 2472 2168 237 42703 2009 19575 6082 3129 793 1968 1239 606 3379 107 3082 2542 2196 326 45023 2010 17680 6262 2972 657 1917 1362 355 4147 101 3667 2359 1728 313 43522 2011 18180 5318 3218 637 1953 1600 278 5558 155 4620 2180 1771 368 45837 2012 18596 5229 3101 617 2431 2503 1134 10284 185 4967 1975 1730 615 53367 2013 15645 5132 2436 572 2337 3677 1897 12498 247 7948 1631 1519 914 56454 2014 14806 5123 2975 558 2263 4097 2139 12035 273 7608 1543 1519 768 55707

145

Appendix F

Regional construction profiles – Per capita expenditure tables

146

Table F.1 Per capita expenditure – private dwelling expenditure (excluding other work done) – $2010

Total activity: 2011 = 100

Average

1993-2011 Average

2011-2015 2011 2012 2013 2014 2015

Brisbane 2274.8 2015.3 100 100 92 111 121Gold Coast 3739.0 1960.1 100 75 78 122 147Sunshine Coast 3559.5 2256.1 100 83 81 108 124West Moreton 1779.3 1988.4 100 83 99 114 127Wide Bay/Burnett 2020.5 1440.2 100 78 73 96 111Darling Downs 1404.3 1667.7 100 83 86 103 114South West 526.5 1117.1 100 139 238 258 275Fitzroy 1508.0 2109.4 100 138 171 194 208Central West 392.2 1258.1 100 137 190 299 342Mackay 2067.3 2394.5 100 97 116 123 130Northern 2160.5 1956.5 100 102 106 130 148Far North 2115.2 1507.0 100 109 116 147 169North West 431.9 647.1 100 85 77 141 187Queensland 2349.9 1939.4 100 95 94 117 131

Note: Fiscal years.

Table F.2 Per capita expenditure – public dwelling expenditure – $2010


Average

1993-2011 Average

2011-2015 2011 2012 2013 2014 2015


Note: Fiscal years.

147

Table F.3 Per capita expenditure – private dwelling expenditure (other work done) – $2010


Average

1993-2011 Average

2011-2015 2011 2012 2013 2014 2015


Note: Fiscal years.

Table F.4 Per capita expenditure – total dwelling expenditure – $2010


Average

1993-2011 Average

2011-2015 2011 2012 2013 2014 2015

Brisbane 3445.7 3102.1 100.0 96.0 97.4 89.8 100.3Gold Coast 5023.7 3108.9 100.0 69.9 58.5 64.0 83.3Sunshine Coast 4492.6 2890.1 100.0 83.2 72.6 77.0 93.0West Moreton 2272.5 2270.2 100.0 87.7 79.5 89.3 99.1Wide Bay/Burnett 2556.6 1723.7 100.0 85.5 72.1 70.5 82.7Darling Downs 2036.3 2260.7 100.0 108.8 102.9 95.5 104.0South West 884.6 2112.3 100.0 101.7 124.0 148.6 155.0Fitzroy 2151.1 3483.0 100.0 101.2 121.3 144.1 153.9Central West 833.6 1552.2 100.0 119.7 164.8 163.9 216.1Mackay 3041.9 3856.6 100.0 82.9 79.1 95.1 102.5Northern 3079.8 2958.7 100.0 79.4 74.1 77.9 92.8Far North 3031.5 2007.1 100.0 79.7 77.6 87.4 102.4North West 924.6 1349.5 100.0 96.6 102.3 98.3 136.9Queensland 3350.4 2889.2 100.0 88.0 84.7 84.8 97.7

Note: Fiscal years.

148

Table F.5 Per capita expenditure – private expenditure non-residential building – $2010


Average

1993-2011 Average

2011-2015 2011 2012 2013 2014 2015


Note: Fiscal years.

Table F.6 Per capita expenditure – public expenditure non-residential building – $2010


Average

1993-2011 Average

2011-2015 2011 2012 2013 2014 2015


Note: Fiscal years.

149

Table F.7 Per capita expenditure – total expenditure non-residential building – $2010


Average

1993-2011 Average

2011-2015 2011 2012 2013 2014 2015


Note: Fiscal years.

Table F.8 Per capita expenditure – private engineering expenditure – $2010


Average

1993-2011 Average

2011-2015 2011 2012 2013 2014 2015


Note: Fiscal years.

150

Table F.9 Per capita expenditure – public engineering expenditure – $2010


Average

1993-2011 Average

2011-2015 2011 2012 2013 2014 2015


Note: Fiscal years.

Table F.10 Per capita expenditure – total engineering expenditure – $2010


Average

1993-2011 Average

2011-2015 2011 2012 2013 2014 2015

Brisbane 2220.9 3025.4 100 109 87 67 72Gold Coast 3995.2 85 100 133 115 100 90Sunshine Coast 3547.2 65 100 98 58 49 62West Moreton 2434.1 72 100 110 87 71 97.6Wide Bay/Burnett 4107.1 69 100 179 174 154 222.7Darling Downs 7409.6 76 100 250 441 499 660.1South West 41970.5 140 100 510 865 986 706.2Fitzroy 34040.0 72 100 196 236 229 318.5Central West 13020.5 72 100 140 191 219 303.9Mackay 25969.0 75 100 120 200 191 253.5Northern 3222.4 85 100 74 48 37 43.2Far North 2209.0 80 100 92 72 59 73.9North West 15116.5 90 100 192 286 244 272.0Queensland 6302.5 83 100 138 155 144 173.7

Note: Fiscal years.

151

Table F.11 Per capita expenditure – total construction expenditure – $2010


Average

1993-2011 Average

2011-2015 2011 2012 2013 2014 2015


Note: Fiscal years.

152

Appendix G

The results of a selected Survey of representatives of the Queensland Department of Housing and Public

Works Regional Managers

153

Queensland construction survey July 2012

As in previous years, respondents were asked a series of questions to seek their views on the current circumstances of the construction industry, the industry’s outlook and the underlying factors impacting construction activity in Queensland.

Respondents were asked to identify any major projects in their region. Respondents may not have had a complete view across all sectors of the construction industry. NIEIR therefore completed additional research in relation to the progress of these projects.

Questions asked by the survey were as follows.

1. How has the industry performed recently in your region?

2. Are there any regional factors that have accelerated or constrained the construction industry’s performance recently?

3. What is the split between public and private sector activity?

4. Relative to last year’s growth in the construction sector how do you think performance will compare; a) over the short term (next 12 months) and b) over the medium term (next 2-3 years)?

5. Are there any regionally specific factors that you believe will deliver comparatively superior/inferior performance in your area over the short to medium term, being next 12 months out to 2-3 years?

6. Are you aware of any major projects that will occur prior to 2022? Are you aware of the details of the respective projects costs, timing, developers, and industry?

7. Are there any particular industries that you can identify which are likely to be subject to major investment/projects prior to 2022?

8. In respect of these projects can you confirm costs and timing for the respective projects?

9. Thinking of the total volume of work the industry is able to undertake with 100% being unable to take on any further work, in percentage terms what capacity do you estimate the industry is currently operating at 70/80/85/90/95/100?

10. By how much have construction costs increased over the last year?

11. Labour shortages by type?

12. What are the issues relating to construction industry training and apprenticeships?

154

Commonalties and summary

• This survey was conducted to the background of the merger of Qbuild and Project Services and significant staff reductions in the Queensland Public Service including the regional Qbuild offices. Understandably, there was a general atmosphere of uncertainty among respondents about the future.

• Federal Government stimulus package related construction activity and natural disaster repairs were complete and respondents reported a general decline in public sector construction works across the state. A general slowing of construction activity was reported outside of those regions directly influenced by resource based activities.

• One of the issues where concerns were raised was training of trade and other construction related skills. The loss of Qbuild apprenticeships in the future was seen as a problem for the construction industry in Queensland as Qbuild has traditionally led the skills development and training effort of construction trades in Queensland. It was seen as increasingly important to continue the trade training effort through apprenticeships in the private sector, in schools, TAFEs and trade training centres and the like.

• Domestic housing construction was generally slower except in those centres which had become a residential hub for fly-in-fly-out, drive-in-drive-out mine workers.

• As last year the mines continue to have an influence over employment of tradespeople.

• Again few skills shortages were reported in this year’s survey, specialised trades such as mechanical, electrical, refrigeration and plumbing tend to be scarce in regional and remote regions.

• Tender responses in terms of number of responses had improved in most regions.

• There are pricing variations between regions with many regions reporting no or only minor increases in costs.

• Typically, although there were exceptions, quality issues experienced during the construction boom of a few years ago were no longer evident.

• Private sector property development activity is broadly slow, and the shortage of work at the design stage, suggests a further slowing in construction activity. A number of major public construction projects such as major hospitals were nearing the end of their construction life cycle.

• In terms of industry capacity, regions were reporting variation which ranged from 50% to 100% operating capacity. The figures were generally lower than in previous years.

• The social impact of the concentration of construction work to resource based regions and the decline of construction activities elsewhere was raised as an issue. This is because trades people, if they wish to continue employment, are increasingly likely to work away from their families and do so sometimes for lengthy periods of time. There are also the social impacts on communities which are host to high numbers of fly-in-fly-out workers.

155

Summary of industry responses

Wide Bay Burnett

1. How has the industry performed in your region recently?

Last twelve months have been busy as we have completed a number of capital works projects. Hervey Bay has remained active with construction industry activity in domestic and commercial and there have been a number of education projects (15 or so) with a value between $100,000 and $150,000. Expenditure by the public sector also includes work for Indigenous community with expenditure of around $1 million.


The population growth of the region tends to drive construction activity and infrastructure development. The growth of the region as a residential centre for fly in fly out workers has also reduced the capacity of the private sector construction industry as tradespeople head to the mining regions, particularly the Gladstone region.


Public sector construction activity represents approximately 75% – 80% of all construction activity.

4. Relative to last year’s growth in the construction sector how do you think performance will compare; a) over the short term (next 12 months); and b) over the medium term (next 2-3 years)?

(a) Next twelve months construction activity will go downhill, we are (public sector) going through huge changes and our own staff are being laid off or leaving to work elsewhere because of the uncertainty of our situation.

(b) Nothing on the horizon at the moment that suggests activity will increase in the longer term.


Skills are thinning as we lose key people to mining sector, however slowing of construction industry generally means that we are receiving large number of applications for available jobs (up to 70 applications). Our capacity to manage projects is being reduced but we are still able to manage the projects that remain. Getting competitive pricing on smaller jobs can be difficult so we tend to use our own staff so we can keep costs down.

Likely residential growth around Gympie, Bundaberg still busy.


At Gympie there will be a new community centre at a cost of around $2 million. Some construction activity at Tin Can Bay that relates to the army’s Wide Bay training area. Work on schools will continue.

156

Works on St Stephens Hospital, Hervey Bay.

A new coal mine near Maryborough is on the drawing board so some growth likely in the region. Supermarkets doing research in region.


Health is a possibility

Education

Mining related infrastructure


St Stephens hospital – $50 million.


Overall, construction industry capacity running at 75% and declining, builders looking for work.


Not much change but response to tenders remains poor.

11. Labour shortages by type

If shortages exist tends to be the highly trained trades such as mechanical, air-conditioning or electrical.


All looks okay at the moment, important to keep up-skilling trades so they are able to comply with Australian standards, building codes etc. Construction industry is now far more segmented with specialist trades working on specific stages of buildings; this makes project management more difficult as less commitment to entire project.

157

Brisbane


Downturn construction industry wide (at least 15% as far as we are concerned).


Government belt tightening is flowing through to rest of business and community resulting in economic difficulties and contraction of industry.


Public sector activity has ground to a halt. The new $570 million Supreme and District Court is now complete. No other major projects on horizon.


(a) Decline in construction activity, will go backwards.

(b) Some increase in activity from low ebb.


Old court site will be redeveloped at some point by the private sector.


Not that I know of.


Not applicable.


Not applicable.


60%


Costs are similar to last year, static.

158

11. labour shortages by type

None


There is a problem as apprentices are not getting work. As builders head to projects in mining regions and industry remains in doldrums, the worst situation in twenty years, lack of training at this time will cause problems in a few years time.

159

Far West


Last twelve months has been very busy for Qbuild. Domestic construction market has slowed. Builders are chasing our jobs.

We have lost our own staff because of government cut backs, finding new staff when we need them is difficult. Staff are leaving because uncertainty at Qbuild.


As before Mt Isa and Cloncurry have significant mining activity in their regions. Two major projects hungry for trades, issues are availability of trades and very high rents so many people can’t afford to live here.


90% private.


(a) Slowing in government and housing sectors.

(b) Unsure.


Mining activity creating some difficulty in sourcing trades for construction work outside of mines. Government cutbacks make it hard in more remote regions.


New projects include two new mining camps to accommodate 3,000 and 3,500 workers.

Relocation and development of mining related processing facilities.


Mining


Unsure

160


Generally the construction industry is operating at around 100% capacity. Shortage of staff and high rents contribute to the pressures locally.


Transport costs have increased, cost of concrete remains a problem as there is only one supplier. Accommodation costs are up.


Electrical, refrigeration and plumbing trades remain in short supply.


Current difficulties will create shortages of skilled trades in coming years.

161

Cairns region


Depressed and getting worst, not too much hope in near future. A number of our contractors have gone belly up and subbies are hurting. Consultants laying people off – doom and gloom.


Getting worst, much worse than it was, with little confidence in private sector. Not much government work and activity in this sector declining.

Tourism reliant, but no major tourist developments. There is some prospect of increased tourism from China. The region is in economic down cycle.

No benefit from mining boom.


Unsure


(a) At the bottom.

(b) Some pick up after that.


The region has high unemployment and there is a decline in skills as people move away from the region to seek employment. If you lose a job here it is very hard to get another one. We tend to have itinerant work force and once skilled workers leave it is hard to get them back.


No new projects on horizon, Cairns Base Hospital expansion has a couple of years to run.


N/A


N/A

162


75% and declining. There is a lot of spare capacity.


Prices are steady as everyone is desperate for work.


Shortage of engineers, this is a more general issue.


Decline of apprenticeship programme in Qbuild, an important trainer for the industry, will create skills shortages in 4 or 5 years time.

163

Darling Downs


Market steady – getting more competitive, not a lot of work or money around.


West of Toowoomba there is a significant natural resources area and this means construction costs high in the towns in the Surat Basin. These towns include Chinchilla and Roma and this tends to impact on rest of region. Accommodation costs further west tend to drive construction costs up. The mining related construction work to the west of Toowoomba is generating employment for subbies.

There is a shortage of subbies living in regional towns to the west, this means accommodation has to be provided when building projects occur in these remoter areas and this creates difficulties. If available locals are busy no option but to bring in trades from other regions. Typically we can get materials to the region quickly.

We are seeing a lot of builders from the more depressed SEQ looking for work in the Darling Downs region.


80% private sector / 20% public sector. Federal Government stimulus projects now complete so this has meant a reduction in public sector construction activity.


(a) The next twelve months are going to be really difficult. The government has made it clear that this will be a tough budget. Our client agencies have almost no building works. Capital works and infrastructure programmes have been cut right back; this has had a significant impact on industry.

There is a lack of confidence within the private sector who is expecting a really tough year. The private sector is now struggling.

(b) Hard to know.


Mining influence coming from the region. Toowoomba appears to be becoming a hotspot for residential investment with a growing rental market. The cost of property is still quite reasonable. Local industry / business relates to mining, farming and University.

Qbuild staff often the only ones who can attend to remote government building infrastructure.

164


No major new projects on horizon, this is a significant issue for all of Queensland. There is a significant gap in forward planning. Only thing I can think of in Queensland is the work required for the Commonwealth Games but a lot of sporting infrastructure already exists on the Gold Coast.

All our major projects are at the end of their construction cycle.


N/A


N/A


At about 60% – 70% capacity.


Costs pretty steady and competitive and looks like costs, outside of Surat Basin, coming down.


All okay, no shortages.


As Qbuild reduces operating costs there will be a consequent impact on skills development particularly on intake of apprentices and training programmes. Qbuild is the largest employer of apprentices and Qbuild being cut back very hard.

165

South Coast


Moved from busy to flat. This decline in activity means better prices and it is easier to get things done. Domestic construction flat and trades have left region to work in mines. Commercial building activity has also dropped off. Very little investment at the moment.


Quality has improved because of lack of work fly-by-nighters have left industry and reaming skilled trades doing the jobs.


60% public sector.


(a) Depressed, government actions will make the difference.

(b) Long term, not much happening in the future.


Very low level of investment in construction projects.


Most big jobs coming to an end, not much being flagged for the future at this time. There appear to be no new major investments in infrastructure.

There is talk of possible investment in resort style tourism by Chinese.


Some activity in:

• education

• health, and

• transport.


N/A

166


50% at most.

Large building firms now chasing small jobs – this is an indicator that things are very tight. Also a lot of builders withdrawing licenses and getting out of industry.


Some costs such as steel increasing, concrete cheaper than it was. Unsure about the impact of the carbon tax on building costs. Builders are starting to offer discounts just to stay alive.


No shortages, specialist trades all okay. More people are starting to chase mining money. Gold Coast is a hub for fly-in-fly-out mine workers.


There will be a long term impact on skills as the industry is employing fewer apprentices – skills shortage five years down track. Training is drying up as economic circumstances get worst. Long term decline in training and training providers hurting badly. Situation unclear, people do not know where this is heading.

167

Southport


We think of ourselves as the canary in the mine, we tend to be an indicator of what will happen to the construction industry in non mining areas across Queensland. We are experiencing a general downturn and we are looking forward to Commonwealth Games.


Brisbane has slowed and this has impact on construction industry and contractors across the region.


Not sure – two new police station projects put on hold, not a lot of new public sector work going on.


(a) Down, no new schools, no public housing projects on horizon.

(b) Hard to predict, looks very quite.


Mining drags up workers to north and pushes up costs locally.


Commonwealth Games infrastructure.

Local Government library and hub development.


Sport.

Local Government.

Transport infrastructure.

Health related construction continues.


Unsure.

168


At about 50% – lots of people are looking for work, people struggling and now giving up with construction industry. Two builders recently gone into liquidation.


Costs have gone down, people can’t afford not to sharpen pencil. Mining has an impact on costs.


Engineers.


Qbuild apprenticeships no longer happening and Qbuild was a great trainer for the construction industry in Queensland. We are now placing pressure on private sector construction firms to take up the slack. We are in for skilled labour shortages in five years time.

169

Sunshine Coast


Downturn across the board, the only places progressing is the regional centres with mining influences over the top of other economic activity. Whole of SEQ housing activity suffering from downturn. Commercial activity in our region ticking along, but no major boom.


General economic conditions creating uncertainty. In migration has slowed, people sitting and waiting to see what happens with government services and investment. Contractors laying off staff and trades moving to Gladstone and other mining regions. Trades are moving out of SEQ and this is having big impact on families.


Slowed down so not sure of current split.


(a) No budget for new works (put back until September) and cuts to government agencies will further slow activity.

(b) Not sure about longer term, no mining activity.


The economic conditions.


No major projects, unlike past, that I know of outside of health.

Sunshine Coast University Hospital - The public hospital - the centrepiece of a new world-class health precinct at Kawana - will be delivered as a Public Private Partnership, with the selected consortium to build, own and operate the infrastructure for 30 years and the state paying rent.


Health


Sunshine Coast University Hospital – $2 billion – Construction 2012-2016.

170


At around 55% – 60% and even lower than last year.


Nothing substantial, lots of responses to small tenders.


No shortages of skills or labour.


Training budgets are likely to get cut. We need to make sure training in critical areas continues. There is likely to be a reduction in the number of apprentices.

171

Maroochydore


Lots of phone calls from consultants and contractors who are looking for work. Things are very quite on Sunshine Coast. Sunshine Coast builders relying on jobs from Wide Bay region.


Contractors are having difficulty in getting subbies in Wide Bay so our subbies heading off there. One of the local contractors has gone belly up and this has hurt local subbies.

The Sunshine Coast population continues to grow so the region will require infrastructure upgrades and expansion.


Not sure – we are not as busy as usual as most of our projects are on hold. The private sector also appears to be quite.


(a) Very slow. We are all waiting for budget in September.

(b) If the tap is turned on again there will be a considerable lag as projects go through planning.


General economic conditions and skills moving away as trades look for work in other regions.


Sunshine Coast University Hospital – completion 2016 will have big impact on construction industry here.

Apart from hospital developments and other health related construction not a lot in terms of major projects with the exception of some educational work including Sunshine Coast TAFE SARC development (Skills, Academic and Research Centre).

There are new housing projects at Kawana and Caloundra and elsewhere in region and commercial developments which include the Sunshine Plaza redevelopment and Shopping World at Kawana and possible development of the Coolum Resort and surf club development at Bokarina Beach.

172


Health

Education

Housing construction

Commercial


Sunshine Coast University Hospital – completion 2016 - $2 billion approx

TAFE - $60 million


Less than 50% – really quite with most builders looking for work.


Tenders hotly contested, massive response to tenders – we received 15 tenders for neighbourhood centre (once we were lucky to get 5 tenders for these kinds of projects).


No particular skill shortage at the moment but that could change.


TAFE seems to be concentrating on allied health training, trade training centre at Nambour has had some difficulty in filling some courses. It is likely that these current training circumstances will lead to a shortage of trades people. Problem will occur when projects take off and difficulty sourcing skills may arise in 2014 – 2016. Fewer young people attracted to industry and apprenticeships because of volatility of construction sector in Queensland.

173

Rockhampton


Coped well with demand last year but demand for our services now dropping rapidly. Gas and coal activity is absorbing resources. Rest of economy does not get a look in, industry still impacted by GFC. Not a lot of commercial building activity outside of mining infrastructure and little public sector building activity. No major new capital works, grim for regional industry generally.


No, polarisation of industry.


75% private.


(a) Can’t say, only see it getting worst, net huge injection of capital works from government to get whole thing moving again.

(b) Even less certain.


Skills being lost as people walk away from region. If you lose a job in this region there are no new ones. Also losing apprenticeships as three or four contractors have gone bust in last twelve months – major job losses.

The building industry in Queensland is in real trouble.


No


No new projects, existing projects towards end of life cycle.


N/A

174


60%.


Large firms chasing small jobs, competitive situation.


Loosing skills as people leave region, getting vinyl layers is now difficult.


Loss of apprenticeships, No more Qbuild apprentices. We are creating critical skills shortages for the future and we don’t know what that means yet. Even simple trades will be in short supply.

175

Capricornia


Public housing projects have stalled, few new houses. Gladstone’s impact on region as a result of resource based developments has been positive. Rockhampton has been relatively quite with not much construction occurring in either the industrial or housing sectors. To the west of Rockhampton, Gracemere has an industrial estate whose businesses now service some of the resource based activity at Curtis Island and Gladstone.


Very little of this resource related construction work coming our way. No new government projects at this time and no new apprenticeships are being offered by Qbuild.

There is a great deal of uncertainty about the situation, people are worried about the financial situation. Rockhampton is not being sold well, while Gladstone private sector housing construction activity is going gang busters, Rockhampton is seeing very little fly-in-fly-out residential.


Private sector activity will be very dominant. Government activity very flat.


(a) Public sector activity very flat. Slow down next financial year, capital works look as if they have stalled. Government construction will stop for twelve months.

(b) After that will be tough.


We have had problems with finishing projects in recent times as builders have gone bust, this is because builders from further south have quoted lower prices to get the work and have not been able to deliver.


Alpha Mine development.

Various Gladstone projects relating to resource based activities.


Resource based, mining and liquid gas.

176


N/A


Public sector 60% – we have enough work to keep our staff going. We have lost staff.


Pricing of tenders all over the place, there are big variations – some builders are trying to buy projects while others are trying to maximise profits. Steel prices seem to go up all the time, other material prices going up slowly.


Electrical mechanical trades in short supply and government can’t entice them onto projects.


No new apprenticeships at Qbuild will have its impact on construction industry training.

177

Burdekin


Over last twelve months construction industry activity in our region has been stable, now slowing up. Qbuild’s workload last year was very high with more work than we have ever had. This was a mix of new construction activity and maintenance.


Natural disaster recovery work completed and Federal Government funded stimulus work also completed.


Private sector 95%


(a) Slow down.

(b) Capital works projects stalled as budget has been delayed, this will have consequences longer term.


Townsville industry / commercial doing reasonably well and more construction activity likely two to three years out.


Cruise Ship Terminal.

Health – work continues on hospital development.

Sports stadium.


Tourism.

Health.

Sport.


N/A

178


80% private sector. Public sector, given resources, running at 95%.


Nothing noticeable.


Mechanical / refrigeration / plumbing are the trades where we have some concern.

Mines are finding it difficult to source trades.


Construction industry needs to continue training activities.

179

Whitsunday


Mackay is expanding, housing construction activity in the region is growing. Associated infrastructure required to meet demands of expansion.


Coal mines have a significant impact on the region. We are attracting drive-in-drive-out residents.


85% public sector.


(a) Private sector activity will continue to grow because of mining activity, Public sector construction activity will decline, our office has been downsized.

(b) Activity will be driven by mines, industrial and commercial in Mackay is growing and this is likely to continue.


Again activity driven by mine developments and expansion.


Not sure


N/A


N/A


Private sector 100%

180


Costs have increased in line with CPI at around 3%. However living expenses in Mackay are rising fast, “everything has a mining tax on it”.


Not so bad locally but in regional Queensland it tends to be the specialty trades that are in short supply, this includes electricians and plumbers.


Training issues not a problem here at the moment. Quality can be an issue and we have lost a number of experienced staff and these skills are not being passed on our replaced. Also the construction industry is losing trades to mines.

181

Townsville


Performance interesting, noticeable slowing of construction activity but we are not seeing any sharpening of prices. There is however a much stronger interest in tender box. Larger contractors now looking to mining sector to supplement work elsewhere.


No particular shortage of trades at this time but no glut either – a reasonable level of evaporation of trades is occurring. The mining sector is taking up slack.


Public sector activity – major projects at planning stage have been stopped (such as the bio security facility), anything contracted still continuing. Majority of activity will be in the private sector.


(a) We will get quieter before we get busier. Bleak, will be toughest year ever and confidence has disappeared. Investment in short supply.

(b) Beyond twelve months slow recovery likely.


Major builders are withdrawing from region, Cairns companies are now looking to our region which, because of its economic diversity including industry, defence, refineries and education and its large state and federal public service base, tends to be more stable.

There is still some life in the housing construction sector in Townsville. The city has become a fly-in-fly-out residential area for mine workers.


Not much happening in terms of new projects outside some federally and state funded construction activity at James Cook University


Health – hospital projects still underway.

Education.

182


N/A


60%.


Flat – prices have not gone down. No significant changes in material costs.


Not appreciable but still no surplus of trades, impact of mines. There is some sense that the hospital project has difficulties in sourcing trades and some trades being sourced from Cairns which has greater capacity to supply trades.

183

Appendix H

Major projects taken into account in developing the regional projections

185

SD Total cost ($ m) Project Start date Production

date Status

Brisbane 8200 Brisbane underground rail project Plans announced 2016 Possible Brisbane 4100 Airport Link - a continuation of the NSBT mainly by tunnel north to Sandgate

Road, Gympie Road and the East-West Arterial, linking to Airport Drive. Late 2008 Aug-12 Under construction

Brisbane 1700 'Legacy Way' (formally 'Northern Link') 4.6 km road tunnel linking the Western Freeway, Toowong with the Inner City Bypass and Kelvin Grove

2011 Late 2014 Under construction

Brisbane 1600 Transform the aviation complex into a multi-faceted business hub Plans announced 2020 Possible Brisbane 1402 Construction of a new 359 public-bed Queensland Children's Hospital 2H 2008 Late 2014 Under construction Brisbane 1400 East-West Link - cross-river tunnel linking the Pacific Motorway and O'Keefe

Street at Buranda in the east to the Western Freeway and Toowong in the west

Feasibility study underway 2026 Under consideration

Brisbane 1300 New Parallel Runway project: new 3,600-metre system runway parallel to the existing runway, Brisbane Airport

Planning underway, 2012 start 2020 Under consideration

Brisbane 1147 Moreton Bay Rail Link 2011 2016 Under construction Brisbane 1000 ICON Ipswich - Ipswich CBD renewal over 4 city blocks and including

commercial, retail, residential and public space 2011 2016 Under construction

Brisbane 777 Inner northern busway project, sections 3- 5 2H 2007 2012 Under construction Brisbane 731 Northern busway project, Windsor to Kedron 1H 2007 2012 Under construction Brisbane 700 Construction of a 36-level office tower, Queen St above Regent Theatre,

Brisbane 2010 Mid 2012 Under construction

Brisbane 693 Upgrade of Kingsford Smith Drive to cope with new traffic conditions following opening of inner city bypass

DA lodged na Under consideration

Brisbane 650 'North Lakes' retail and commercial precinct, Mango Hill Mid 1999 2012 Under construction Brisbane 590 Construction of the 70 storey Trilogy Tower - includes a five-star hotel,

20,000sqm of office space and apartments, 480 Queens St., Brisbane Plans approved, possible 2012 start na Under consideration

Brisbane 570 Brisbane Supreme and Districts Court development 2007 2012 Under construction Brisbane 500 Expansion of Brisbane airport's domestic terminal - includes additional gate

lounges and retail space and a new central energy plant, Brisbane Apr-10 2013 Under construction

Brisbane 490 Transit lanes at Logan Motorway, Pacific Motorway 2H 2008 2012 Under construction Brisbane 452 State of the art Police Academy at Wacol 2009 2014 Under construction Brisbane 417 Springfield Line: Richlands to Springfield 2011 2014 Under construction Brisbane 334 Translational Research Institute (TRI) in the Princess Alexandra Hospital

grounds 2010 2013 Under construction

Brisbane 332 Two lane extension of the Port of Brisbane Motorway: Lindum Road to Pritchard Street

2010 2012 Under construction

Brisbane 300 Westfield Carindale expansion to 137,000sqm - includes 120 new shops and 550 extra car parks

2011 Sep-12 Under construction

Brisbane 250 Development of a business park known as "citiswich", Ipswich 2007 2015 Under construction Brisbane 244 Mount Lindesay Highway (Brisbane - Beaudesert), Rosia Road - Chambers

Flat Road, grade separation works 2011 2014 Under construction

186


date Status

Brisbane 233 Brisbane Technology Park - a new hotel and restaurant precinct, 14 commercial projects and two multi-level car parking stations

Plans announced, possible 2012 start 2017 Under consideration

Brisbane 215 Restoration of Brisbane's City Hall 2010 Oct-12 Under construction Brisbane 195 Construction of a "missing link" - Gateway Motorway at Nudgee to the Bruce

Highway Planning underway for a mid 2012 start

2014 Under consideration

Brisbane 180 Gasometer 2 - 23,400 square metres of commercial space Approval granted, 2012 start Jul-14 Committed Brisbane 153 Morayfield Road, Bruce Highway - Gaffield Street, duplicate from 2 to 4 lanes 2011 2014 Under construction Brisbane 130 Redevelopment of Brisbane Exhibition Ground (including 10,000 seat

stadium) Bowen Hills 2010 Late 2012 Under construction

Brisbane 128 500kV transmission line from Halys to Blackwall Plans announced, possible 2012 start 2014 Under consideration Brisbane 122 Ipswich Hospital expansion: two new floors to the Clinical Services Building,

extension to the Emergency Department and refurbishment works May-11 Q3 2013 Under construction

Brisbane 100 Expansion of Australia Zoo - includes a 350-room luxury hotel and an African safari park, Peachester

Site set aside by govt. 2015 Under consideration

Brisbane 90 Western Arterial Road (Jindalee - Everton Park), Wardell Street / Samford Road, improve intersection

2012 2014 Committed

Brisbane 70 Orion shopping centre expansion, Springfield Plans approved, 2012 start 2013 Committed Brisbane 60 Redevelopment of the Howard Smith Wharves precinct on the Brisbane

River, Brisbane 2010 2012 Under construction

Brisbane 57 Swanbank B substation replacement 2011 2013 Under construction Brisbane 38 Refurbishment of North West Plaza at Everton Park, Brisbane Jun-11 Mid 2012 Under construction Brisbane 33 Richlands substation primary and secondary plant replacement 2011 2012 Under construction Brisbane 30 Office fit out for ATO at 47-79 Elizabeth St Brisbane CBD Apr-11 May-13 Under construction Brisbane 26 Upgrade of Centre of Excellence for cricket - includes accommodation,

recovery pool, indoor training centre and a medical room, Allan Border Field, Brisbane


Brisbane 25 Rebuilding and expansion of Coles, Ipswich Q3 2011 Aug-12 Under construction Brisbane 21 Mango Hill state school - stage 1 2011 2013 Under construction Brisbane na Circa Nundah Village development: office, retail and residential development

(total cost is $271 million), cnr Sandgate and Buckland Rds, Brisbane Jun-11 2013 Under construction

Brisbane na Office building , incl. retail and residential components (14,000 sqm), above Milton railway station (Total cost $300m)


Brisbane na Urban renewal project - 400 residential units, offices, retail and car space (Total cost is $500m) Hamilton Harbour, Brisbane


Brisbane na Southpoint (total cost $650m) - includes a 130-room hotel, 56 residential apartments and an arthouse cinema, South Bank

Late 2010 2012 Under construction

Darling Downs 15000 Curtis LNG project - construction of an LNG plant and a 540km pipeline to pipe gas from the Surat Basin


187


date Status

Darling Downs 7000 Wandoan coal mine - including rail link to the mine site EIS approved, pending final approvals for possible 2012 start


Darling Downs 1750 Toowoomba bypass, including four lane viaduct, tunnel bypass and link to the Warrego Highway

Seeking finance, possible 2012 start na Possible

Darling Downs 1500 Solar Dawn Project, Chinchilla, Western Downs Plans in progress 2015 Under consideration Far North na Agate Creek gold project, 80km south of Georgetown Feasibility study underway na Possible Far North 446 Cairns Base Hospital Redevelopment that will deliver 168 more beds 2H 2008 2014 Under construction Far North 88 Development of the Einasleigh copper project, north Queensland Feasibility study completed 2010 Under consideration Far North 63 132kV transmission line to replace current line between Cardwell and Tully 2011 2013 Under construction Far North 40 New prawn farm facility - includes 259 land-based aquaculture ponds, Great

Barrier Reef 2010 2012 Under construction

Far North 34 Tagai State College - Mer Campus relocation 2010 2012 Under construction Fitzroy na Washpool coking coal project - includes open-cut coal mine Feasibility study underway na Possible Fitzroy na Gladstone nickel project , stage 2 EIS approved na Possible Fitzroy 23000 'Australia Pacific LNG' - New CSG to LNG facility, includes a 450-kilometre

transmission line, Curtis Island at Gladstone 2011 2015 Under construction

Fitzroy 16200 New LNG facility (GLNG), Gladstone, based on Coal Seam Methane reserves

2011 End 2015 Under construction

Fitzroy 8300 Galilee Basin coal project - includes two surface and four underground mines EIS released, pending approvals na Under consideration Fitzroy 6400 Alpha Coal Project (Stage 1): thermal coal mining project - includes 490km

train line, port construction and equipment and infrastructure construction, Galilee Basin

Approvals granted, FID due in Q2 2012

Q2 2015 Under consideration

Fitzroy 3600 Alpha Coal Project (Stage 2): thermal coal mining project, Galilee Basin Planning underway na Possible Fitzroy 2700 Gladstone nickel project, stage 1 - Development of a nickel and cobalt

refinery, Gladstone EIS approved, possible 2012 start na Under consideration

Fitzroy 2500 Queensland coke and power project - Coke manufacturing plant, 25km South West of Rockhampton

EIS completed na Possible

Fitzroy 2200 Liquefied natural gas (LNG) plant, Fisherman's Landing Wharf, near Gladstone

2012 2014 Committed

Fitzroy 1500 Construction of Coal terminal, Wiggins Island, Port of Gladstone - Stage 1 (total cost $2.5 bn)


Fitzroy 1250 900MW coal-fired power station, Galilee Pending approvals, possible 2012 start

na Under consideration

Fitzroy 1200 Ensham Central Project: new underground longwall mine (8mtpa), 40 km North East of Emerald

Plans in progress na Under consideration

Fitzroy 1200 Gladstone nickel project, stage 1- Marlborough (Lagoon Hill) nickel / cobalt mine, North West of Rockhampton

Approvals granted, plans in progress 2018 Under consideration

188


date Status

Fitzroy 1000 Moura Link-Aldoga Rail: electrified rail and supporting infrastructure, Coal terminal, Wiggins Island, Port of Gladstone - (part of stage 1, total cost $2.5 bn)

1H 2011 Late 2013 Under construction

Fitzroy 1000 Arrow Energy LNG project: gas to liquids project, Curtis Island off Gladstone Approvals pending, EIS underway na Under consideration Fitzroy 1000 Construction of an inland railway from Surat coal basin to the Port of

Gladstone Final investment decision due in 2012 2014 Under consideration

Fitzroy 1000 Balaclava Island coal terminal FID pending na Under consideration Fitzroy 1000 Construction of Coal terminal, Wiggins Island, Port of Gladstone - Stage 2 Feasibility study underway End 2015 Under consideration Fitzroy 1000 Construction of Coal terminal, Wiggins Island, Port of Gladstone - Stage 3 Plans announced End 2020 Possible Fitzroy 750 Minyango coal mine - underground coal mine and associated infrastructure,

Fitzroy BFS underway 2013 Possible

Fitzroy 602 Gladstone Steel Project: steel plant for the Aldoga Precinct Pending approvals, 2012 start Q1 2014 Under consideration Fitzroy 575 Liquefied natural gas (LNG) plant based on coal seam gas, Gladstone Feasibility study underway Possible Fitzroy 500 Surat Gladstone pipeline - 470km pipeline between the Surat Basin and

Gladstone Community consultation in progress, 2015 start


Fitzroy 372 Fitzroy Pipeline project 2009 2012 Under construction Fitzroy 350 Baralaba expansion, 150 km west of Gladstone Feasibility study completed 2014 Under consideration Fitzroy 244 Rockhampton Hospital upgrade and improvement 2H 2007 2013 Under construction Fitzroy 220 Central Queensland Gas pipeline, Moranbah to Gladstone (600km) EIS completed, FID due in early 2013 na Under consideration Fitzroy 150 New 200-bed private hospital, Kawana Sep-11 2013 Under construction Fitzroy 128 275kV transmission line from Calvale to Stanwell 2011 2014 Under construction Fitzroy 125 Stanwell power station upgrade - includes low pressure turbine/generator

upgrade and nitrogen oxide burners 2009 2012 Under construction

Fitzroy 120 Dawson Valley water infrastructure - Nathan Dam (880,000 Ml) EIS submitted, mid 2012 start Early 2014 Under consideration Fitzroy 100 The Pearl Resort: 333 bedrooms, commercial space, indoor sports facility

and health spa retreat, Haven Road, Tanby Point, Emu Park Plans submitted for approval na Possible

Fitzroy 20 QAL refinery expansion - conversion of power generation capabilities from coal to gas, Gladstone

Pre-feasibility study complete na Possible

Fitzroy and Brisbane 3600 2 new gas-fired power stations near Ipswich and Gladstone Plans announced na Possible Mackay na Marina redevelopment, incl. 550 marine berths, restaurants, shops, offices

and residential component (Total Cost $650m), Bowen Plans announced na Possible

Mackay 4200 Caval Ridge Project: new coal mine, Bowen Basin 2012 2014 Under construction Mackay 3600 X110 Project: Abbot Point coal port terminal Expansion (from 50mtpa to

110mtpa), stage 4, Bowen Seeking state and Cth approvals Mid 2015 Possible

Mackay 2800 Belvedere Coal Project, Bowen Basin Pre-feasibility study completed, possible 2013 start

2016 Possible

Mackay 1681 Grosvenor coking coal deposit (7.5 mtpa), 8 km North of Moranbah Approvals granted for a Q3 2012 start 2016 Committed

189


date Status

Mackay 1600 Daunia coal mine - coal handling and preparation plant, Overhead 66 (kV) transmission line and associated works, 150km south west of Mackay

Mid 2011 2013 Under construction

Mackay 1300 Connors River Dam and Pipelines Project - includes 133km pipeline Q1 2013 Early 2014 Committed Mackay 1250 Eagle Downs coal project.: development of three longwall mines, Bowen

Basin Approvals granted, FID granted, 2012 start

Q3 2015 Committed

Mackay 1158 Extension of the Kestrel longwall mine (total cost $US991 million), Bowen Basin


Mackay 1000 Peak Downs coking coal prospect expansions (by 3 mtpa), 20km South of Moranbah

Approvals and tender granted, 2012 start

2014 Committed

Mackay 1000 New rail network from the Goonyella Riverside operation to Abbot Point Seeking govt approvals 2013 Under consideration Mackay 1000 Dalrymple Bay Coal Terminal expansion, 38km south of Mackay Plans announced na Possible Mackay 935 Moranbah ammonium nitrate plant, Bowen Basin 2008 Jun-12 Under construction Mackay 879 Broadmeadow extension project: develop an adjacent open pit, new

infrastructure and associated works, 140km south west of Mackay 2012 2013 Under construction

Mackay 500 Upgrade of the Hay Point Coal Terminal, stage 3 (capacity increase from 44mtpa to 55mtpa)

Feasibility study underway 2015 Under consideration

Mackay 408 Construction of a new Mackay Base Hospital - 155 beds End 2009 End 2013 Under construction Mackay 300 Development of the Monto open cut thermal coal project (stage 1), Bowen

Basin, south of Gladstone Feasibility study completed 2012 Possible

Mackay 148 Mackay - Slade Point Road, Forgan Road - Pioneer River, duplicate bridge and approaches


Mackay 140 Overhaul of water and wastewater infrastructure - includes new wastewater treatment plants at Bowen, Cannonvale and Proserpine

2012 Mid 2013 Under construction

Mackay 120 Mackay co-generation project - new renewable energy generator, Mackay 2011 End 2012 Under construction Mackay 50 Construction of a biodiesel fuel plant, Mackay , Queensland EIA underway na Possible Mackay 30 Safety upgrades at Kinchant Dam 2011 Mid 2013 Under construction Moreton na "Emporio" - includes 200 apartments, offices, dining, shops and a fresh food

marketplace (Total Cost is $1 bn), Maroochydore Early 2006 2012 Under construction

Moreton na Jewel development - includes 623 hotel suites, luxury apartments and residences and retail shops (total cost is $950 million), Surfers Paradise

Pending final approval, 2013 start na Under consideration

Moreton na 'The Harbour' mixed use project - including retail and residential developments in Emerald Lakes, Carrara, the Gold Coast

Plans underway na Under consideration

Moreton na Cruise ship terminals, Broadwater (Gold Coast) Planning stages na Possible Moreton na Residential and commercial development (Total Cost is $800m) - includes a

mix of high-rise offices and apartments and retail outlets, Gold Coast DA to be lodged early 2009 na Possible

Moreton 2600 SEQIPP: Caboolture to Maroochydore rail link from Beerwah to the Sunshine Coast as part of the South-East Queensland Infrastructure Program

2019 2026 Possible

Moreton 2033 Construction of a new 450-bed hospital, Sunshine Coast 2013 2016 Under consideration Moreton 1762 Construction of a new 750- bed Gold Coast University Hospital, Parklands 2008 End 2012 Under construction

190


date Status

Moreton 1195 Gold Coast Rapid Transit project: light rail system (tram line), Gold Coast - Stage 1

2H 2009 2014 Under construction

Moreton 894 13km light rail network from Griffith University to Broadbeach, Gold Coast 2011 2014 Under construction Moreton 500 Redevelopment of the Horizon Shores marina, incl. expansion of industrial

space and facilities, near Jacob's Well 2008 2012 Under construction

Moreton 500 Redevelopment of Pacific Fair Plans underway for a possible 2012 start

na Under consideration

Moreton 419 Upgrade to the Sunshine Coast Airport: new 2,430 m east-west runway Plans announced, 2014 start 2020 Possible Moreton 415 Construction of a 600ha correctional facility, Gatton, south-east Queensland 2008 2012 Under construction Moreton 350 Expansion of main gaming floor, includes new restaurants and bars, Jupiters

Hotel and Casino, Gold Coast Pending approvals for a 2012 start 2015 Under consideration

Moreton 150 Sippy Downs town centre, corner of Stringybark Road and Sippy Downs Drive

2012 2013 Committed

North West 1500 720km high-voltage transmission link between Townsville and Mount Isa Plans underway Late 2014 Under consideration North West 1400 Paradise Phosphate Project Mt Isa Feasibility study completed, seeking

approvals na Under consideration

North West 589 Ernest Henry shaft underground (SHUG) copper-gold mine, Cloncurry 2010 Q1 2013 Under construction North West 500 Diamantina Power Station - includes gas power station and 2000

transmission towers, Mt Isa Tender announced, 2012 start Mar-14 Committed

North West 500 Dugald river, zinc lead and gold project, near Mt Isa On hold pending a rebound in metal prices

na Possible

North West 474 Redevelopment of the Mount Isa Hospital 2009 2012 Under construction North West 275 Westmoreland uranium project (21,000 t) Scoping study underway na Possible North West 274 George Fisher Mine expansion to 4.5 mtpa 2011 2013 Under construction North West 246 "Lady Loretta": greenfield underground zinc mine expansion, Mount Isa 2011 End 2013 Under construction North West 150 Rocklands copper project, Cloncurry EIS submitted na Under consideration North West 149 Mount Isa Line capacity enhancement program 2011 2016 Under construction North West 133 Black Star open cut mine expansion, Mount Isa Plans approved, 2012 start 2016 Committed North West 65 Mt Isa Health Campus redevelopment 2009 2012 Under construction Northern (QLD) na Mixed use development - 'Central', on former Queensland Rail site,

Townsville (Total value $400m) May-07 2014 Under construction

Northern (QLD) na Ben Lomond Uranium Project, near Townsville Pre feasibility study underway na Possible Northern (QLD) 278 Nornico nickel and cobalt mine, 250km north west of Townsville Feasibility study completed 2010 Under consideration Northern (QLD) 230 Underground power cable from PNG to Weipa, Townsville and Purari and

Hydro-electricity power plant Wabo, PNG Feasibility study to be completed by 2012

2020 Possible

Northern (QLD) 190 Flinders Hwy upgrade - construction of a new Townsville Port access road 2H 2008 2012 Under construction Northern (QLD) 170 New Cleveland Youth Detention Centre 2H 2009 2012 Under construction

191


date Status

Northern (QLD) 130 Redevelopment of Willows Shopping Centre, Townsville DA submitted na Under consideration Northern (QLD) 118 Cruise terminal, Port of Townsville (Breakwater Quays project, total cost

$1bln) Jan-12 2013 Under construction

Northern (QLD) 100 Townsville General Hospital expansion to double emergency department capacity and deliver 100 extra beds

2H 2007 2012 Under construction

Northern (QLD) 63 Ergon Energy HQ, 13-storey building, 420 Flinders St, Townsville Tender to be awarded, 2012 start Dec-13 Committed Northern (QLD) 42 New office building - includes 4 levels of office space, a catering shop plus

140 car parking spaces, Walker St sitem, Townsville Pending approvals, 2012 start na Under consideration

Pilbara 2164 Nammuldi iron ore mine expansion Plans approved, 2012 start Q3 2014 Committed South West 53 Spring Gully, coal seam methane project, 80km North of Roma, phase 5 Plans announced na Possible Wide Bay-Burnett 613 Section B Bruce Hwy upgrade: Cooroy to Curra - new 4 lane road 2009 2012 Under construction Wide Bay-Burnett 62 Two new substations at Western Downs and Halys - includes transmission

lines 2011 2013 Under construction

Wide Bay-Burnett 61 Tarong coal infrastructure upgrades - includes the overhaul of the dragline, mine fleet replacement and upgrade to coal handling processing plant


750 Gas-fired power station, Hunter Valley Planning underway na Possible Unallocated 3900 Queensland infrastructure repair from early 2011 floods - includes road and

rail works 2011 2013 Under construction

Unallocated 889 240 extra kindergarten centres 2010 2014 Under construction Unallocated 179 Construction of a new regional cancer centre in Townsville, Rockhampton,

Bundaberg, Hervey Bay and Toowoomba 2010 2013 Under construction

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