Shovel-ready delays, but stability ahead for civil construction in NZ
MEDIA RELEASE: Civil Contractors New Zealand and Teletrac Navman announce results of 2020 Construction Industry Survey.
COVID-19 and the electoral cycle are causing short-term pain for civil contractors in the next 6-12 months, but contractors remain optimistic about the industry’s future, with record spending on infrastructure projects as a cornerstone to the Government’s economic recovery plan.
Results from the 2020 Construction Industry Survey, a partnership between Civil Contractors New Zealand and Teletrac Navman and indicate despite the Covid-19 lockdown interruption, the industry sees a promising future as the Construction Accord, three waters reforms and New Zealand Infrastructure Commission begin to have a stabilising effect on the forward work pipeline.
Resilient civil contractors are taking a range of measures to withstand the short-term challenges they are experiencing around cashflow, uncertainty of the pipeline of work and cancelled/ deferred contracts. With local and central Government representing 75% of clients for the construction industry, contractors are anticipating the positive impact of the Government’s recent New Zealand Upgrade programme (69% expect positive impact over three years) and shovel-ready infrastructure announcements (68%) will help balance out reduced local government spending caused by COVID-19’s impact on local government budgets.
Respondents indicated Government should focus on three areas to ensure the industry remains stable and can deliver on infrastructure. First, respondents indicate that they need a project road map ensuring large infrastructure projects are spread more evenly over time and amongst regions. Second, this needs to be clearly communicated to the industry so it can prepare its workforce. Third, the industry needs flexibility with bringing in key staff and construction specialists from overseas. Key examples would be specialist tunneling engineers needed for the City Rail Link – Auckland’s subway system which is currently in development – and the Central Interceptor – an important expansion to Auckland’s sewerage system.
“Although it’s a difficult economic climate, many contractors are confident in their own resilience and are looking to retain, and in some cases, hire staff in the next 12 months” says Peter Silcock, Chief Executive at CCNZ. “Contractors will need to take steps to ensure their businesses can withstand a short-term reduction of work over coming months, ahead of projects planned over the next five years.”
“It’s heartening to see the industry recognises the role of technology in managing health and safety in the workplace. Providing employees with a safe and efficient workplace will help to attract talent – including younger generations who have grown up using IT and other technologies,” says James French, Construction Industry Specialist at Teletrac Navman. “Technology is also being used by to measure environmental impacts such as waste management, water usage on site and carbon emissions. And we expect this trend to rise positively in coming years, as clients build environmental outcomes into contracts.”
The 2020 Construction Industry Survey captured responses from business leaders and managers, between 8 – 28 June 2020, to gauge attitudes on a wide range of issues including current events, workforce, technology, and sustainability.
The full results of the 2020 Construction Industry Survey are available to download at https://www.teletracnavman.co.nz/resources/resource-library/articles/new-zealand-2020-construction-industry-survey.
The results were released in a State of Civil Construction webinar on 2 September, featuring commentary from renowned journalist Bernard Hickey, as well as a panel discussion with NZ Infrastructure Commission Chief Executive Ross Copland, Downer Chief Executive Steve Killeen, Gair Contracting Managing Director Bailey Gair, Isaac Construction Chief Executive Jeremy Dixon and Teletrac Navman Construction Industry Specialist Jim French.
2020 Construction Industry Survey Key findings
- 83% say the development of a clearer pipeline of central and local government work will have a positive impact over three years
- 69% say large projects under the New Zealand Upgrade programme will have a positive impact over three years
- 68% say regional projects under the Shovel Ready Projects programme will have a positive impact over three years
- 59% are confident in their businesses’ ability to withstand change and overcome challenges
- 29% are confident in the outlook for the construction industry
- 40% are neither confident nor unconfident
- 31% are not confident
- 19% are confident in the New Zealand economy
- 24% say their turnover will grow in the next 12 months (from June 2020) (50% in 2019)
- 30% say their turnover will stay the same (32% in 2019)
- 47% say their turnover will shrink (17% in 2019)Covid-19 impacts (as of June 2020)
- 22% were forced to lay off staff
- 37% were affected by travel/transport restrictions.
- For Auckland businesses, 51% were impacted, with 29% of those citing the impact was for incoming staff / team members.
- 47% expect turnover to shrink over the next 12 months (from June 2020)
- 19% had contracts cancelled or deferredWorkforce
- 32% predict that their requirement for staff will increase over next 12 months (from June 2020)
- 46% predict it will stay the same
- 21% predict it will decrease
- 25% say a skill shortage and availability of workers is the main challenge facing the industry
- 69% would hire today if the right skills were availableTechnology and sustainability
- 47% are confident in the ability of new technology to improve business efficiency and overcome challenges
- 77% use technology to measure adherence to workplace health and safety
- 37% of contractors say clients have indicated that sustainability practices will impact their procurement decision making
- 77% are taking action to be more environmentally sustainableSurvey methodology
The 2020 Construction Industry Survey is an online survey that sampled 188 adults within the New Zealand construction industry via an online survey from 8 – 28 June 2020. The survey was commissioned by Teletrac Navman and Civil Contractors New Zealand and produced by research firm Colmar Brunton. Margin of error for the total sample is + or – 7.1 percent at a 95 percent confidence level.
View the Media Release here
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