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MELBOURNE MARKET UPDATE - SEPTEMBER 2010

Recent months have sent a range of mixed messages to the market, with a tightly fought Federal Election, a looming State Election in Victoria (Late November), along with variable signals from the economies in Europe and the USA. With this being the backdrop as we approach the final quarter for 2010, there are positive signs in certain areas, indeed some sectors feel that they are booming along, however other market areas remain relatively downbeat. Mixed into this is evidence of new projects emerging within the private sector that, if they continue, bodes well for 2011.

From a recruitment perspective, we can report a solid market with consistent demand, although many clients are uncertain as to how projects will unfold, with only a few specific project sectors demanding full project teams, and as a result of this very specific positions are being listed rather than a widespread requirement for full project teams.

At risk of sounding repetitive from earlier updates, we have consistently used the term “ a two tiered market” over the past 2 years and in many respects this is still the case, although that gap has closed to a large degree comparatively from this time last year.

With a late November State Election, several institutional projects that are well down the selection path are likely to become “election promises”, therefore with anticipated commencements in the New Year. The scale of these projects alone suggest a strengthening of the employment market in 2011, particularly for technical Project team members, spanning Project Architects, coordinators and CAD based team members.

In terms of specific project sectors, the residential apartment market continues solidly, with a variety of mid to larger scale developments under construction, and with further new large-scale developments in early stages likely to get the go ahead over the next few months. Institutional projects in the higher education, transport, health, research and community sectors are well represented in the current market, with this work still required to underpin private sector activity levels into 2011/12. Whist very early, we are seeing evidence that commercial and mixed-use developments in the $200 to $350M scale are in early concept and feasibility stages, although finance is still a major factor in how these projects will ultimately evolve.

The interior design sector shows continued positive signs, with activity in the commercial (and refurbishment), retail and hospitality sectors all showing increases in activity, however it is still a step away from being a buoyant market across all areas.

Demand exists for skilled Architects, Technicians and Interior Designers, particularly those with demonstrated Revit exposure. Design Architects with 3D based talent and Interior Designers with sound management skills are also increasingly in demand.

We are experiencing a balanced market for CAD based technicians and documentation team members currently, with an increase in short term contract roles being evident over the past 3 months meaning contract roles making up 70% of demand, versus 25% permanent opportunities. This has meant limited long term “career roles” for experienced technicians, however we anticipate this changing into early 2011 as larger projects create increased demand. Of those 30% of roles with a long-term viewpoint, many offer exceptional opportunities or career potential.

We have still seen redundancies occurring over the past quarter, however the majority of those affected have been able to secure new roles quickly, indicating demand versus supply is favorable from a job seekers perspective.

The seasonal increase of Working Holiday makers coming into the market from offshore, and Graduates starting to look for their entry in the employment market means that there will be competition for the available roles, with opportunities more likely in the New Year for job seekers in these areas.

As we approach the end of the year, many firms are unsure of how salary review and increases will be addressed, with salary growth being in the area of 3% over the past 6 months. This is at a time when many practices are still unsure of their definite prospects into 2011, along with taking on new projects under competitive fee situations. Based on this, year end salary reviews will be an interesting time for many, given that the potential for personnel shortages in some sectors will be increasingly on the minds of job holders looking to increase their earning capacity.

Certainly fee competition on new projects is an increasing issue for many practices, and this appears to have become more aggressive as the year has gone on. This has the potential to create financial stresses if activity levels increase and with it upward pressure on rates and salaries.

So it is with cautious optimism that we look toward 2011. Offshore markets remain uncertain, and the extent of private sector finance available for larger scale, commercial and mixed-use projects being the remaining questions that could temper activity next year. The remaining months of 2010 are likely to stay relatively quiet until we see direction taking shape for next year.
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Bloomfield Tremayne News & Events

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