Diversity in city developments

AS more and more cranes appear on the city skyline in response to the boom engulfing the state, it's not the largest amount of cranes to occupy the CBD area, according to the Master Builders Association of Western Australia.

Housing director Gavan Forster said the late 1980s was the period that hosted the highest amount of cranes in the metro area - 38 in all - during his 30 years in the sector.

While the current estimate of 30 cranes currently operating in the city may not be as high as the 1980s figure, Mr Forster told WA Business News, there is a difference between the developments back then and now.

"It's a combination of office space and inner city apartments, that's one stark difference from the previous boom of 38 cranes," he said.

"None of the cranes in the old days was for inner-city apartments; it was all primarily office space, so it's a bit more diversified development this time, a combination of the traditional commercial buildings plus the residential apartments." While the overall housing sector is experiencing a downturn thanks to higher interest rates and lower consumer confidence, commercial construction in the state is set to soldier on for a few years despite a recent national construction survey.

The April construction index of the Australian Industry Group- Housing Industry Association Performance returned its worst reading since the survey began, dipping 5.1 points to 42.6 points.

The association said the drop took the industry further below the critical 50 points level which separated expansion from contraction.

But the national story is far from the real picture here in WA, where Mr Forster said non-residential building activity is likely to reach around $3 billion this year, and a similar figure is projected for next year.

"There is so much work in the pipeline that we will be insulated from any commercial building downturn for some time," Mr Forster said.

"As long as the commodity price boom continues, then that puts dollars into Western Australia and there's no reason activities are going to slow down dramatically." "There's still at least another 18 months to two years worth of very solid workload ahead." In the latest quarterly update from the Master Builders Grant Thorton Survey of Industry Conditions, where 43 builders contributed to the survey, profits in the commercial building sector remain strong.

Around 52 per cent of respondents said their companies were experiencing a good level of profits over the December quarter, down from 57 per cent from the previous quarter.

Meanwhile, 44 per cent of participants reported average profits, up from 36 per cent.

Of general concern to builders in the survey was poor performance of government agencies, particularly Western Power, in providing necessary infrastructure for timely construction of projects.


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