The 2020 Construction Industry Survey recognises the pain the pandemic and electoral cycle will cause pain for civil contractors over the next year, but also reveals that 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 Teletrac Navman and Civil Contractors New Zealand, (the online survey sampled 188 adults within the construction industry from 8–28 Jun) indicate that 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,” says the survey report.
“With local and central Government representing 75 percent of clients for the construction industry, contractors are anticipating the positive impact of the Government’s recent New Zealand Upgrade programme (69 percent expect positive impact over three years) and shovel-ready infrastructure announcements (68 percent) will help balance out reduced local government spending caused by Covid-19’s impact on local government budgets.”
Respondents indicated that the 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 are specialist tunneling engineers needed for the City Rail Link and the Central Interceptor projects.
CCNZ chief Peter Silcock says many contractors are confident in their own resilience and are looking to retain, and in some cases, hire staff in the next 12 months.
“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.”
James French, Construction Industry Specialist at Teletrac Navman, says it is also “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.
“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.”
Survey key findings
Over 80 percent say the development of a clearer pipeline of central and local government work will have a positive impact over three years; 69 percent say large projects under the New Zealand Upgrade programme will have a positive impact over three years; and 68 percent say regional projects under the Shovel Ready Projects programme will have a positive impact over three years
Almost 60 percent of those surveyed are confident in their businesses’ ability to withstand change and overcome challenges; almost a third are confident in the outlook for the construction industry while another third are not confident.
Only 19 percent are confident in our overall economy and around a quarter say their turnover will grow in the next 12 months (from June 2020). However, 47 percent expect their turnover to shrink and 30 percent think their turnover will stay the same.
As to impacts of the pandemic from June some 22 percent were forced to lay off staff; 37 percent were affected by travel/transport restrictions; and 19 percent had contracts cancelled or deferred
As for staff 32 percent predict their requirement for staff will increase over next 12 months (from June 2020); 46 percent predict it will stay the same; 21 percent predict it will decrease; 25 percent say a skill shortage and availability of workers is the main challenge facing the industry; and 69 percent would hire today if the right skills were available.
In terms of technology and sustainability, 47 percent are confident in the ability of new technology to improve business efficiency and overcome challenges; 77 percent use technology to measure adherence to workplace health and safety; and 37 percent of contractors say clients have indicated that sustainability practices will impact their procurement decision making.
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
Taking the pulse of the industry