“It’s all relative I guess . . . I would say prices are extremely competitive, builders in some cases are tendering for turnover to keep on their good staff," he said.

Given WA’s population growth and the level of investment in the state, Mr McLean said most builders were optimistic and small builders appeared to be holding up.

“There have been none of late [going to the wall]," he said. “I’d like to think there won’t be more casualties."

Perth-based mid-tier commercial builder Gavin Construction managing director Sean Gavin said: “It’s interesting times. Prices certainly aren’t going up because of margins, margins are still very tight . . . all clients, whether they are government or non-government, appreciate they’re getting a good deal," he said.

Gavin Construction builds government and private sector projects worth up to about $35 million.

Mr Gavin said while WA was renowned for high wages, compliance issues, including energy ratings, had caused the greatest cost increases for his business. He anticipates materials costs will also rise due to the carbon tax. Gavin Construction also does work in the Pilbara and Mr Gavin said margins were healthier in the north than in Perth, despite high wages and transport costs.

The state’s new Building Act, which came into effect in April, has been blamed for sluggish approval figures in both the commercial and residential sectors, holding up development and putting more pressure on cash-strapped subcontractors.


The need to run new buildings before the Fire and Emergency Services Authority was one factor causing blowouts in the approvals timeline, Mr McLean said.

The WA government is drafting amendments to the bill based on industry feedback .

Brookfield Multiplex, one of the biggest builders in WA, was unable to comment on the effect construction costs were having on its operations.