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Massive Rebound In Civil Construction Business Confidence

WELLINGTON, New Zealand, 30 July 2021 – New Zealand’s civil construction industry is riding a massive rebound in post-pandemic business confidence – but this may be undermined by skills shortages, which continue to be the industry’s number one challenge.

Findings from the 2021 Construction Industry Survey, a partnership between Teletrac Navman and Civil Contractors New Zealand (CCNZ), validate growing sector confidence, with 50 percent of those polled optimistic the New Zealand construction industry is on the upward trajectory and over half predicting turnover and staff growth in the next 12 months.

A significant difference in this year’s survey results is a rise in the requirement for skilled staff to unprecedented levels, with growing workloads and closed borders. Industry is confident about future work but needs clarity from local and central government on when work will come to market. As New Zealand normalises post-pandemic, issues such as fluctuating costs, sustainability and environmental impact have returned to the spotlight, and will influence client procurement decisions that sets how the country’s infrastructure is built in years to come.

"It's encouraging to see the groundswell of optimism in New Zealand’s civil construction industry, which indicates the country is back to business-as-usual post-COVID," says Peter Silcock, CEO, Civil Contractors New Zealand. "The future of construction in New Zealand certainly lies in keeping the people within this sector confident, so civil contractors can continue to invest in the right people, capability, and equipment for the work ahead.”

What the future holds

The good news is infrastructure activity is forecast to increase to NZ$10.1b in 2025. Already, transport, water and subdivision projects dominated new infrastructure activity in 2020, contributing 85 percent of projects and 88 percent of total value1.

Three Waters assets are projected to require between $120b and $180b investment over the next three decades, which supports the survey results where participants identified Three Waters projects and maintenance efforts with the most significant number of opportunities for increasing capability. This is followed closely by roading (24 percent), public transport (17 percent) and public infrastructure (16 percent).

As New Zealand eases out of Covid-19 restrictions, the construction industry has a renewed focus on both the issues and challenges. This may impact the potential growth they expect from the pipeline of work they have before them and on benefits they may achieve using emerging technologies.

“The industry has said, loudly and clearly, that they want local and central government to provide a clearer pipeline for upcoming work,” says Jim French, Construction Industry Specialist, Teletrac Navman. “However, the lack of clarity impacts their planning for manpower and resources in these uncertain times. Covid-19 still affects the industry, as border closures dampen hiring outside talent and delay the supply of building and construction materials. Renewed buoyancy on the other hand is putting the spotlight back into sustainability and environmental issues.”

Survey methodology
The 2021 Construction Industry Survey is an online survey that polled 161 qualified civil construction professionals representing a range of roles and regions across New Zealand from 12 May to 1 June. All survey respondents were stakeholders in a range of sub-sectors and businesses that work on Kiwi roads, water and energy networks and broadband and community infrastructure. The survey was commissioned by Teletrac Navman and Civil Contractors New Zealand and produced by research firm Colmar Brunton. The margin of error for the total sample is + or - 7.7 percent at a 95 percent confidence level.

The 2021 Construction Industry Survey is available for download at

https://www.teletracnavman.co.nz/resources/resource-library/articles/new-zealand-2021-construction-industry-survey

2021 Construction Industry Survey Key Findings

Industry confidence

  • 50% polled are confident in the outlook for the construction industry
  • 61% are confident in their businesses’ ability to withstand change and surmount challenges
  • 52% are hopeful of new technology being able to improve business efficiency and overcome challenges
  • Top 3 areas and events occurring in the next three years that could have high positive impact on surveyed businesses:
  • Development of a clearer pipeline of central and local government work (20%)
  • Large projects under the NZ Upgrade programme (12%)
  • Regional projects under the Shovel Ready Projects programme (11%)
  • 55% say their turnover will grow in the next 12 months (32% in 2020)
    • 35% say their turnover will stay the same (30% in 2020)
    • 10% say their turnover will shrink (47% in 2020)

Workforce

  • 66% predict that their requirement for staff will increase over next 12 months (32% in 2020)
    • 29% predict it will stay the same (46% in 2020)
    • 4% predict it will decrease (21% in 2020)
  • 50% (double the percentage points from 2020) say a skill shortage and availability of workers is the main challenge facing the industry
  • 87% would hire today if the right skills were available (69% in 2020)

Technology and sustainability

  • 52% are confident in the ability of new technology to improve business efficiency and overcome challenges
  • 48% of contractors say clients have indicated that sustainability practices will impact their procurement decision making (37% in 2020)

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