Clear vision critical to city success

Clear vision critical to city success

Latest construction industry findings from AECOM show the overwhelming majority of those working in the infrastructure and buildings sector feel a clear, well-defined vision is a key success factor for a city. However, many respondents tasked with shaping the future of New Zealand’s urban centres say they would struggle to articulate what their city’s vision actually is.

According to AECOM’s six-monthly nationwide construction market Sentiment Survey released today, 88 percent of respondents highlighted the importance for cities to have a well-defined, well-communicated and cohesive vision, but the disconnect between aspiration and reality remains a concern.

“With the world in the midst of a demographic shift towards urbanisation, cities are in the spotlight more than ever. It is widely recognised that a clear city vision enables city and business leaders, influencers and citizens, to work cohesively together to deliver a brighter future for all communities, so these latest findings are somewhat troubling,” said Craig Davidson, Group Director Buildings + Places at AECOM.

Craig Davidson continued, “The latest AECOM Sentiment Survey findings send a clear message to city leaders. More must be done to engage all citizens, not only those leaders in the infrastructure sector, with the future direction of our cities.

“New Zealand’s economic and population growth is increasingly concentrated in just a handful of cities, creating infrastructure pressures in housing and urban infrastructure including water and roads. As an industry we need to be agile to deal with pinch-points, avoiding supply chain pressures and the cost of time delays. Consideration should also be given to further incentivising broader growth in the regions to mitigate these infrastructure demands.”

Talent and materials in short supply

Looking at nationwide industry challenges, concern over skills and materials shortages has escalated; 59 percent of respondents expressed concern, up 19 percentage points from our last survey. Gaps have been identified in the numbers of qualified, competent personnel available at every level of the construction sector, including professional engineers, surveyors and engineering technicians, procurement and construction managers, tradespeople and apprentices.

Matthew Heal, Director – Construction Services for AECOM, said: “Project delivery issues arising from a constrained supply chain and a shortage of skilled workers are hampering the industry. This inevitably leads to commercial and quality risk, and will ultimately impact on investor confidence, productivity and value for money.

“This ‘skills gap’ is not corporate fiction and, as employers, educators, investors and suppliers, we need to drive collaborative, industry-wide, and long term solutions to this perennial problem. Let’s recognise we need to take hold of this problem and invest in the future of our industry.”

Meanwhile, outlook continues to strengthen across New Zealand’s infrastructure and buildings sector; AECOM’s latest industry findings show a rise in confidence across all regions with the exception being the Christchurch buildings market, where positive sentiment has dropped significantly from the highs seen after the earthquakes.

Overall sentiment for the NZ infrastructure sector is positive, with 70 percent of respondents expecting investment levels to remains steady or rise over the next three years. At a national level, land development is the sector where respondents expect the highest workload. Sentiment remains particularly strong in Auckland, largely on the back of high net migration and foreign direct investment; 87 percent of respondents anticipate an increase in workload.

Optimism builds
In the Waikato and Bay of Plenty, infrastructure is on a sharp upwards trend; 51 percent of respondents expect growth in infrastructure projects over the next 12 months, up from 32 percent six months ago. The biggest growth in optimism in the buildings sector is evident in this region. With the shortage of housing in Auckland reaching tipping point, the Waikato and Bay of Plenty areas are benefitting from the migration of Aucklanders away from the city; high housing costs and congestion issues are key drivers for moving.

In AECOM’s latest market snapshot, the buildings market shows a clear upturn in positive sentiment in both the investment and delivery space; 68 percent of all respondents have an optimistic outlook for investment expectations, up three percentage points from six months ago. This is consistent with the positive trend seen over the last two years.

Summary of key industry findings:
• Infrastructure optimism stable; 37 percent of respondents expect more infrastructure work across the country, in line with results six months ago
• Waikato and Bay of Plenty infrastructure is on an upwards trend; 51 percent expect growth in infrastructure projects over the next 12 months, up from 32 percent six months ago
• Christchurch buildings market continues to moderate; 19 percent expect increased investment over the next 12 months, down 42 percentage points in the last 12 months
• Land development in Auckland remains high; 87 percent expect increased workload in the next three years, down one percentage point in the last six months
• Steep rise in concerns around skills and materials shortages; 59 percent identify this as a key industry challenge, up 19 percent from results obtained six months ago
• Overwhelming majority see a city’s vision as key success factor; 88 percent consider it ‘very important’ for a city to have a well-defined, well-articulated and cohesive vision
• Majority consider whole-of-life costs in capital investment decisions; 92 percent consider whole-of-life in capital investment decisions to either a moderate extent, some extent, or a great extent.
• Drop in high level of understanding around Big Data and Smart technology; one third of respondents report a high or very high level of understanding within their organisation around utilising Big Data and Smart Technology for business efficiencies, down from 49 percent six months ago.

The full report can be viewed at: www.aecom.com/nzsentiment

ENDS

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