Construction activity tightens: MBA

Housing and commercial construction in Western Australia has significantly tightened in 2011, and prospects for the rest of the year ahead are a continuation of quiet times and leaner profits, a new survey says.

The Master Builders Association/Bird Cameron Survey of Building Industry Conditions revealed a larger number of builders on commercial construction tender lists than historically traditional and "extremely competitive" pricing.

The survey also identified 50 per cent of builders in the commercial construction sector reported below average profits in the December 2010 quarter, compared to 23 per cent in the previous corresponding period.

In the housing market, the survey described activity as "very quiet."

Around 72 per cent of respondents reported average or above profits in the December 2010 quarter, compared to 75 per cent a year earlier.

"Innovative pricing, sales promotions and advertising by large project builders are a sure sign of market weakness," the survey said.

But in a turnaround for a sector usually struggling to fill skills shortages, builders reported no problems in attracting sufficient labour.

The MBA's Building Industry Employment Monitor indicated the number of job vacancies and calls for subcontractors contracted sharply in the early months of 2011.