The release by the ABS today of the March quarter CPI data reveals a stabilization of price increases in Australia. The CPI rose by 0.1% in the March quarter compared to a 1.3% fall in the previous quarter. The annual CPI was 2.5% for the year ending March 2009 compared to 3.7% for the year ending December 2008.
As with the general price data, construction costs have decreased markedly over the previous 6 months. According to ABS Producer Price Indexes data released last Monday, building construction costs fell in Australia by 1.5% in the March quarter with Brisbane recording the steepest fall with a 2.9% fall in costs over the period.
Rider Levett Bucknall expects the cost of construction to continue to fall in most states. "This fall in cost is a consequence of decreasing industry workloads and an increasingly competitive tender market exerting downward pressure on contractor, subcontractor and supplier margins," commented Dr. Andrew Wilson, Senior Economist at Rider Levett Bucknall.
The current and forecast future state of local and international construction markets and the building cost implications will be confirmed next week with the release of data from the Rider Levett Bucknall International Construction Cost Commentary April 2009 Update Survey
This data will not only provide information on the current and forecast level of activity and costs in local markets but will also provide a comparison of Australia's construction performance with that of the major international construction markets.