The BDO Construction Sector Report, now in its sixth year, aims to shed light on the priority issues facing New Zealand’s larger-scale construction businesses ($10M+ turnover), who made up the majority of our survey respondents. The report shares our observations of how some of NZ’s most successful construction businesses are tackling these issues, and provides practical tips based on this.
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Our sixth BDO Construction Sector Report is based on a nationwide survey of more than 210 business owners and leaders in March-April 2024, the report reveals that while the industry appears to be recovering from the construction-specific challenges so prevalent in recent years, it’s now encountering wider economic pressures. Along with an overview of the specific challenges facing the construction sector right now, our report captures the current sentiment of construction leaders and explores their expectations for the future. We deep-dive into specific projects, business types and regions, and provide practical tips for construction business leaders to help navigate the challenges ahead.
Welcome to the fifth annual BDO Construction Sector Report. The world has changed since we released our last report in August 2021. Inflation and interest rates continuing to rise, and the Reserve Bank is actively pursuing a slow down in our economy. In addition, climate change has been taking a very real toll on our country and its infrastructure – we will take months and in some cases years to recover from the recent flooding from Cyclone Gabrielle and other weather events, and these will not be the last natural disasters our country has to overcome. Read the report here.
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A resilient construction sector
So how does this impact the construction sector? Since 2021, the construction sector has proved its resilience. Despite tough economic conditions, most construction businesses have had more work than they can manage – and even now, in this year’s survey results, we are seeing a good level of optimism, with many businesses continuing to manage cash flow and margins well.
That said, the report shows a definite drying-up of forward work for many construction businesses, who are well placed for the next few months, but may be suffering from a lack of work in around six months’ time. This is particularly the case for the residential sector and smaller construction organisations, where confidence is waning.
The way to deal with this uncertainty, is, as ever, managing finances and risk correctly. There will always be ups and downs in the economy, but strong financial and risk management, through both the good times and the bad, will be what sees our construction sector thrive. We hope you find this report useful. Our goal has been to not just talk about the trends and results, but also to give advice and tips throughout to help construction companies overcome the challenges highlighted in the report. Please do remember to reach out to your adviser if you find you are struggling with any of the issues discussed – or to harness any of the opportunities presented.
New Zealand’s construction sector is at a COVID-19 crossroad. The fourth annual BDO Construction Sector Report – ‘Rethinking Construction’ – explores how the disruptive forces brought about by the global pandemic have necessitated a rethink regarding the most effective strategies to operate successfully in and drive the sector forward – building a foundation for broader economic growth. Should New Zealand face an extended Alert Level 4 Delta strain lockdown through 2021, this may prove a pivotal crossroad, driving added impetus for prioritising strategic change.
Our 2021 report sheds light on priority areas of concern and opportunity, and where fresh thinking is required, with a particular focus on; supply, labour, and inflation.
We took the pulse of the New Zealand construction industry and the results are in!
The third in the series, this year’s report is in two parts, revealing the sector’s state of affairs before and after the first nationwide Alert Level 4 lockdown prompted by the spread of the novel coronavirus. The sector, not unlike many others, was heavily impacted by the shifts in economy and work caused by COVID-19, and we hope this report will be used as a tool to highlight the challenges the sector must overcome to recover from the pandemic’s initial impacts, as well as to hone in on the opportunities for survival and growth.
Topics covered in the report include:
A pre-COVID snapshot of the industry
The impact COVID-19 has had on the industry
Key concerns and strategies for survival and growth
Our team of construction experts have recently released the results of the 2019 Construction Survey. This is the second year of the annual survey and already the numbers of participants have more than doubled from last year. The survey is rapidly becoming recognised as an important resource that can provide meaningful insights into current trends and issues in the construction industry.
This year’s survey highlighted issues with low margins and decreasing forward work and the two-tier construction sector comprising experienced operators with robust businesses and management practices and fragile businesses with low margins and inexperienced operators is still very evident. This fragile group is highly vulnerable to the pressures and constraints operating within the industry.
As you may be aware, we recently undertook a comprehensive Construction Survey of nearly 100 New Zealand construction companies. The results are now in and we invite you to download your copy of the Construction Survey Report.
