After prolonged economic uncertainty, most companies in the global engineering and construction sector have renewed confidence in the growth prospects for the industry, according to KPMG International.
The firm’s 2013 Global Construction Survey: Ready for the Next Big Wave found that companies in the Australian industry were more cautious in their outlook than their global peers but were becoming more positive in the medium term.
A general increase in work and margins is giving cause for optimism across the global industry.
Domestically, there is a growing divide between smaller and larger companies, with work for large Australian contractors’ decreasing over the previous year and smaller contractors faring better.
While profit margins globally and domestically were stable, Australian contractors were more positive about the medium term, with 73 per cent of respondents anticipating stable or slightly increased margins in the medium term.
This supports the improving medium-term outlook by the Australia industry. Notably, foreign contractors are emerging as a key source of pricing tension for the larger contractors.
"This year, the tide is turning,” KPMG Australia’s head of property, Steve Gatt, told the Australian Property Council.
"Australian contractors who have survived the GFC are demonstrating a much more positive mood. This sentiment is beginning to materialise, as evidenced by rebounding residential markets.”
According to seek.com.au figures compiled for The Australian Financial Review, construction job ads are in decline across all states—except NSW—despite increasing construction activity.
According to the figures, the declines are most evident in Western Australia and Queensland—states in which construction demand has been heavily reliant on resource projects.
On the other hand, seek.com.au found a 25 per cent jump in job ads in NSW over the past 12 months as well as indicators of a tentative turnaround in South Australia.
In other positive news, the Australian Industry Group/Housing Industry of Australia Performance of Construction Index rose to its highest level in more than three years, jumping 3.9 points to 47.6 in September—but staying below the 50-point level separating contraction from expansion.