Construction costs have held up over the past six months in Australia even as the credit crunch has slowed the work available both locally and overseas.
Australia's relative insulation - so far - from the global construction downturn is revealed in quantity surveyors Rider Levett Bucknall's latest report on global construction costs.
The report provides a handy barometer of how the financial slowdown is affecting different markets, as lower material costs and stiffer competition force builders to rein in prices.
Not surprisingly, the report's global forecast is for extremely subdued levels of growth in tender prices for 2009 and 2010.
The impact of the credit crunch on international construction has been hardest in Asian cities, where tender prices have slowed sharply in the past six months as work dries up.
But in most Australian markets the forecast is for modest growth over 2009, except Melbourne and Brisbane, where tender prices will stay flat. All the Australian markets recorded gains in construction costs over the past six months except Sydney, where prices fell by 0.9 per cent, and Brisbane, where prices were level.
Mark Lochran, national director at RLB, said Australia had partly been protected by a lag effect as the financial squeeze moved through world markets.
"It didn't really hit home here as quickly as oversees," he said. "The UK was the first place to go, then the US, then the US, then Asia, then us and then the Middle East. The Middle East was the last one - that happened in mid-December, early December."
At the same time, Australians also appeared to have a stronger set of "fundamentals" - including strong demand - than other markets overseas, he said.
"But obviously the resource-rich states are dependent on overseas, and that will start to have an effect if China slows more than it already is."
The RLB survey is forecasting cost growth of 3 per cent in Adelaide, Sydney and Perth, 2.5 per cent in Canberra, and 8 per cent in Darwin. Energy giant Inpex's recent announcement that it will invest $12 billion in a new gas plant in Darwin in two years has helped buoy the construction market there.
The RLB analysis uses global cost data to generate indexed measures of the relative costs of construction across the major construction markets around the world.
Over the past six months it was Singapore, with an 8.2 per cent decrease in construction costs, Hong Kong, with a 7 per cent fall, and Macau, with its 5.5 per cent slide, that felt the worldwide contraction the most. The RLB analysis found costs in the three Asian cities tapered quickly last quarter. Singapore slid into recession, while falling material costs and the abrupt end to the Macau's property boom helped reverse costs in Hong Kong and Macau.
Tender prices are expected to decrease a further 6 per cent in Hong Kong and by 10 per cent in Singapore this year.
Construction costs in mainland China also reversed in the past six months, as its economy cooled and demand weakened.
New York, London and Honolulu are the most expensive cities for construction over the past six months.