Building industry salaries cautious amid ongoing pressure

Building industry salaries cautious amid ongoing margin pressure

Updated: 29 Aug 2019

Forty per cent of New Zealand’s building industry employers will increase salaries by three per cent or less when they next review, according to the 2019 Hays Construction & NZIOB (New Zealand Institute of Building) Salary Guide.

Released today, the Guide reveals salary and recruiting trends for New Zealand’s building industry. It found that a further 28 per cent of organisations intend to increase salaries between three and five per cent, while 9 per cent will offer increases of five per cent or more. Six per cent will not increase salaries at all while the final 17 per cent were unsure.

The Guide also shows that the construction sector has experienced good growth over the past year, with 65 per cent of employers reporting increased business activity – up from 53 per cent last year.

Looking ahead, the industry remains cautiously optimistic with over half (54 per cent – again higher than last year’s 49 per cent) of employers intending to increase permanent headcount over the coming year. 30 per cent (up from last year’s 24 per cent) plan to increase their use of temporary and contract workers for both labour and management positions.

With such positive intentions, ongoing skill shortages are a continuing concern, with employers reporting that Construction Managers, Estimators, Senior Managers, Project Managers, Quantity Surveyors, Site Managers and Project Engineers are all difficult to recruit.

Adam Shapley, Managing Director of Hays in New Zealand, said: “As this year’s Guide shows, we continue to see distinct differences in salaries across the regions compared with New Zealand’s main centres."

“We’ve also seen New Zealand’s acute skilled labour shortage remain a major challenge for employers, but with margin pressures so tight, there’s been little impact on salaries.”

Malcolm Fleming, Chief Executive Officer of NZIOB, said: “The financial resilience of the construction sector has been under great scrutiny over the past 12 months, with the prevailing low-margins and high-risk environment now well understood. These factors make it difficult for companies to increase their overheads."

“Salaries aside, we are seeing a sense of positivity, with those surveyed reporting that their business activity had increased markedly over the past year. There was also an increased positivity about the general economic outlook going forward into 2020.”

Other findings from the 2019 Hays Construction & NZIOB Salary Guide include:

• The most popular benefits offered are a mobile phone and vehicle;
• 55 per cent of employers use contract staff for management positions, while 65 per cent use them for labour positions;
• For 70 per cent of organisations the typical working week is between 40 and 49 hours;
• Just 19 per cent of the building industry’s management workforce is female;
• 51 per cent of staff stay with an employer for between three and five years, with another 27 per cent remaining for six to 10 years.

The 2019 Hays Construction & NZIOB Salary Guide covers trends for 17 typical roles in 12 different locations across New Zealand, as well as typical salaries by project size, construction type, and annual turnover. The Salary Guide is available at www.hays.net.nz/nziob

ends

© Scoop Media