Good news for Sydney’s Building Sector
By Daniel Poole on 01 September 2017
With the increase in commercial construction projects in Sydney and solid production activity in residential unit construction, a high demand for tradespeople and specialist sub-contractors has risen to a yearly high. With this demand, tradespeople are being more selective on the jobs they accept which is having a visible effect on tenders and recruitment. In its latest Construction Market Conditions report, WT Partnerships predicts that tender prices in NSW will rise from 4.0% to 4.5% next year; outperforming all other States or Territories.
Commercial Building is taking off in Sydney, projects such as the $2 billion Parramatta Square, the $1.7 billion Wynyard Place redevelopment and the $1 billion Sydney Technology Park redevelopment are just a few of the major projects that have commenced this year. The Government has invested money into building programs for new schools and hospitals, and industrial construction booms as clients utilise gained funds from residential developers on developments on larger, cheaper, packages of land in Great Western Sydney. Rather than pull the construction workforce towards the City, Tradespeople are finding work closer to home in Western Sydney, and his will only increase with the new Airport at Badgerys Creek.
Due to the increase in available construction work, specialist trades are now in a position to negotiate higher margins in accordance to risk, profit and payment. High rise structures and demolition are particular trades demonstrating an increase in pricing, due to the complexity of some major projects. This has also effected recruitment, inflating salaries for both permanent and contract staff due to demand. We are currently at our highest level of permanent recruitment orders since 2015, and as the Building Sector ramps up for Spring this shows no sign of slowing.