Shovel-ready Delays, But Stability Ahead For Civil Construction In NZ
Posted: 09-Sep-2020 |
COVID-19 and the electoral cycle are causing short-term pain for civil contractors in the next 6-12 months, but 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 (CCNZ), indicate despite the Covid-19 lockdown interruption, 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. With local and central Government representing 75% of clients for the construction industry, contractors are anticipating the positive impact of the Government’s recent New Zealand Upgrade programme (69% expect positive impact over three years) and shovel-ready infrastructure announcements (68%) will help balance out reduced local government spending caused by COVID-19’s impact on local government budgets.
Respondents indicated 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 would be specialist tunneling engineers needed for the City Rail Link – Auckland’s subway system which is currently in development – and the Central Interceptor – an important expansion to Auckland’s sewerage system.
“Although it’s a difficult economic climate, many contractors are confident in their own resilience and are looking to retain, and in some cases, hire staff in the next 12 months” says Peter Silcock, Chief Executive at CCNZ. “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.”
“It’s 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,” says James French, Construction Industry Specialist at Teletrac Navman. “Technology is also being used 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.”
The 2020 Construction Industry Survey captured responses from business leaders and managers, between 8 – 28 June 2020, to gauge attitudes on a wide range of issues including current events, workforce, technology, and sustainability.
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