An international survey of the major developed economies shows devaluation and deflation is creating buying opportunities in many areas other than the United States, according to global construction consultants Davis Langdon.

Davis Langdon’s national research director, Rachel Kelloway, said the company had conducted an international survey involving the key Davis Langdon offices in Australia, New Zealand, China, Hong Kong, Dubai, Bahrain, Qatar, South Africa, Philippines, Singapore, the United Kingdom and the USA.

“All markets are in retreat, but some are less exposed to global bank failure,” she said.

“We have studied the opportunities that exist in each region, the inflation rates for 2009 and predictions for 2010, exchange rates now compared to mid 2008 and indicative construction costs.”

Ms Kelloway said that the situation in the two biggest markets, China and the United States, were poles apart.

In China, while the commercial market has slowed considerably, prices are still rising slightly and there are substantial construction opportunities within China’s US$580 billion stimulus package.

“There are distinct opportunities in the civil and infrastructure areas,” she said.

In the United States Davis Langdon found that the worst hit markets were in the West and the South East, that there was a continuing oversupply of housing and due to that construction is likely to lag the wider economic recovery.

“Institutions and public sector clients of ours are active but at low levels,” she said.

“Public sector access to funds is constrained by tax revenues and access to bond funding.”

The survey showed that prices have fallen significantly but resource limits suggest that deflation cannot go much further.

Levels of construction inflation in the US for 2009 are -8 percent and tipped to be -5 to -10 percent for 2010. In China the rate of 2009 is tipped to be 0 percent and tipped to be 3 percent in 2010.

Davis Langdon said in Australia there were opportunities in the areas of education, infrastructure and aged care and retirement. “Housing will not recover before the end of 2009, but there is still a significant housing shortfall,” said Ms Kelloway.

In New Zealand there was continuing contraction in the private sector, with values down 15 to 20 percent in 2008. The opportunities identified were in the area of national infrastructure, regional public sector programs and residential aged care.

Davis Langdon’s office covering the Gulf States highlighted a distinct split between loss of opportunity in Dubai and a higher level of confidence in Bahrain/Qatar.

“In summer 2008 workload in UAE was described as ‘overwhelming’, but there is now significant slowdown and client insecurity in Dubai,” said Ms Kelloway.

“Funding in the Bahrain/Qatar region is secure on the basis of Sharia banking and backing from oil rich investors.”

Davis Langdon said residential opportunities were in Bahrain and Qatar only.

In other countries Davis Langdon found in South Africa there were high levels of activity driven by investment aimed at the World Cup in 2010; in the Philippines private sector activity had slowed, but was still active; Singapore suffered a drastic reverse in 2008 with private sector activity contracting 55 to 75 percent; in the UK housing is tipped to fall a further 30 percent in 2009 and commercial and industrial activity will fall by approximately 15 percent.

Construction costs in US$ equivalents are highest in the UK, the United States and in Singapore.

For further information, contact Meaghan Jones on +61 3 9933 8800 or email mjones2@davislangdon.com.au