Q1 2024 Oceania Market Construction Update [Adelaide]: Throughout 2024, labour shortages and rising wage costs, fuelled by robust industry demand, will persistently drive-up prices.
The South Australian and federal governments remain committed to providing new opportunities into the South Australian construction market. Healthcare, education, defence and road infrastructure projects currently account for a large portion of government investments.
The South Australian economy continues to operate at near capacity with unemployment at low levels. Throughout 2024, labour shortages and rising wage costs, fuelled by robust industry demand, will persistently drive-up prices. This situation is further compounded by widening margins and contractors becoming increasingly discerning about the projects they choose to bid on, thereby exerting additional pressure on pricing.
High interest rates are also likely to restrict the commencement of projects, particularly in the private sector.
Key factors impacting escalation
- Market volatility continued in Q1 2024, with continued labour shortages impacting pricing. However, increased labour costs were partially offset by stabilising material costs
- Potential insolvency of minor and major subcontractors remains an economic concern across all trades and market sectors
- Project durations are under pressure, and typically extending beyond original contractor forecasts
- Government remains committed with major defence, infrastructure, and healthcare projects, including the recent announcement of funding for hydrogen projects
Photo: RLB provided quantity surveying services on Her Majesty’s Theatre Redevelopment, Adelaide, a Department for Infrastructure and Transport heritage and adaptive reuse development.
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