Construction & Trade Sector Set To Perform Better In 2013

20 March 2013

Construction & Trade Sector Set To Perform Better In 2013

• 31% of SMEs saw an increase in revenue in past 12 months
• 42% expect revenue to increase in next 12 months
• 45% have more work than usual in their quarterly pipeline

New Zealand’s construction and trade sector is working its way out of a sluggish recovery, with the Christchurch rebuild creating a positive force, reports a new study by the country’s largest business management solutions provider, MYOB.

The March 2013 Business Monitor, a national survey of 1,000+ SMEs commissioned to independent market research firm Colmar Brunton, found 31% of construction and trade businesses saw a revenue increase over the last 12 months, while 26% reported a decrease.

Christchurch’s construction and trade businesses performed particularly strongly with 39% reporting an increase in revenue, compared to 28% in Auckland.

MYOB General Manager, Business Division, James Scollay says the sector is optimistic about the future in spite of the challenges of the slow recovery.

“The sector’s growth in Christchurch over the past year is due to momentum picking up from the rebuild, while the other main centres continued to show mixed results,” he says.

“Nationwide demand for new buildings is still weak but with the rebuild and Auckland’s economy turning around, construction and trade SMEs are optimistic about the next 12 months. A significant proportion anticipate a revenue rise in the next year when compared with those who actually experienced it in the last year - an encouraging finding.”

42% are expecting to see a rise in revenue, another 42% steady revenue and only 11% a revenue fall. 4% were unsure. Already, 45% of businesses within the sector stated they have a larger than usual workload in the February to April period.

“The fuller workload pipeline for the construction and trade sector has boosted their confidence and brightened their outlook on the recovery, so much so that they were the most positive sector coming into 2013,” says Mr Scollay.

As for pressures in 2013, the sector expects the most to come from fuel prices (77% of respondents). 73% expect it from cash flow and 71% from the timing of customer payments.

“What these numbers show is that while demand is slowly increasing business costs are still rising and those within the sector are working harder to maintain profitability,” says Mr Scollay. “With the competitive market remaining tight, timing of customer payments is vital especially within an industry that often relies on being paid by progress.

“MYOB sees the end of financial year period as a prime period for SMEs to rethink their growth strategies. Consider investing a little time and money in implementing better technologies and streamlining processes that help overcome such challenges. It’s worth exploring cost-effective measures like enabling your online sales avenues with e-commerce functionality and leveraging the productivity benefits of cloud computing.”

About the MYOB Business Monitor
The MYOB Business Monitor is a national survey of 1,000+ New Zealand small and medium business owners and managers, from sole traders to mid-sized companies, representing the major industry sectors. It has run since 2009, commissioned to independent market research firm Colmar Brunton. This most recent survey ran late January/early February 2013. The Monitor researches business performance and attitudes in areas such as profitability, cash flow, pipeline, technology usage and the government. The weighting of respondents by both geographical location and sector is based on overall market proportions as established by Statistics New Zealand and is drawn from an independent survey group, which includes both MYOB clients and non-clients.

About MYOB
Established in 1991, MYOB is one of New Zealand’s largest business management software providers. Its 50+ products and services have been employed by over one million businesses in New Zealand and Australia. MYOB serves businesses of all ages, types and sizes, delivering solutions that simplify accounting, payroll, client management, websites and much more. With a network of more than 20,000 accountants and other professional partners, it provides the support and tools that help make business life easier. Today, MYOB is extending its solutions online and delivering innovation through cloud computing, enabling clients to make smarter connections with business partners and customers. Visit myob.co.nz/smarterconnections.

ENDS

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