Construction activity in Western Australia continues its revival despite recent monthly decline in activity, according to international property and construction consultants Davis Langdon.

Dr Andrew Wilson, Senior Economist and National Research and Development Manager for Davis Langdon pointed to latest Australian Bureau of Statistics data which shows that building approvals fell across all sectors in April compared to the previous month.

"Despite these falls, planned building remains significantly ahead of the levels recorded for 2009," he said.

"The total value of seasonally adjusted building approvals recorded so far in 2010 is nearly 80% ahead of the value recorded for the same period in 2009."

“Residential construction is 50% higher than last year with the level of non-residential activity recorded this year a staggering 175% more than last year.”

Dr Wilson said spending on educational buildings courtesy of the Federal Government’s Building the Education Revolution initiative remained a significant contributor to the massive lift in planned non-residential construction output this year.

“However, commercial and industrial construction in WA are also showing definite signs of revival,” he said.

“Private commercial construction in Western Australia is 129% higher than for the same period last year, reflecting indications of an upturn in the property cycle.”

Residential construction activity remains strong despite the winding back of the First Home Owners Grant. The number of private new home approved in Western Australia is 40% higher in 2010 compared to the same period in 2009.

“Apartment building is also gathering considerable strength in Western Australia with the number of apartments approved in 2010 175% above that recorded for the same period in 2009,” said Dr Wilson.

“Despite the notorious volatility of this series, there has been a significant consistency in the monthly figures recorded for this year indicating a sustained revival in this market.

“As an indication of the relative strength of its construction, for 2010 Western Australia has recorded 17% of the total value of planned building in Australia.

“This compares to New South Wales that, despite a significant population difference, has recorded 21% of Australia’s planned building so far in 2010.”

The value of buildings approvals per head of population for Western Australia in 2010 is $1,791 compared to New South Wales with $707 and the Australian figure of $1,109.

Western Australia has approved $1,830,297,000 more building in 2010 compared to 2009. This equates to over 10,000 direct full time jobs for one year for the construction industry and nearly $5.25b in direct and indirect benefits to the local economy.

“With the certainty of gathering momentum in the construction industry as general economic revival gathers pace both locally and internationally, together with a raft of planned resource and infrastructure projects in the pipeline, skilled labour shortages and associated cost increases loom as a reality for the building industry in Western Australia,” said Dr Wilson.

“The challenge for policymakers, both at state and federal levels, is to effectively manage scare resources within a highly competitive environment to ensure that  cost breakouts do not undermine the economic sustainability and viability of what is likely to be a period of significant and potentially unparalleled growth and prosperity for Western Australia.”

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