After a long period of stability, New Zealand’s infrastructure industry has seen a dip in confidence as workload expectations ease across the country, while optimism has lifted slightly in the buildings market, according to AECOM’s six-monthly nationwide construction market Sentiment Survey, released today.
The survey highlights easing sentiment within the infrastructure market across all regions; 36 percent of respondents now expect increased workload, down from a peak of 46 percent six months ago.
This change in outlook is most noticeable in Christchurch, which is down 27 percentage points in the past year and half; the reduction in SCIRT’s rebuild activity is a likely contributor to the uncertainty; four years on from the disaster, recognition of a longer, slower rebuild rather than a peak is broadening.
Of note, Sentiment highlights a continued disconnect between those involved in the respective investment and delivery sides of the infrastructure market. This disconnect may produce an unwelcome knock on effect – lower quality, less innovation and higher whole-of-life costs – if unsustainably low pricing is used to capture market share.
“As an industry, we are continually challenged to do ‘more-for-less’. Lifting productivity in an environment of financial constraint means we need to invest in innovation and technology to achieve these competitive advantages,” said John Bridgman, AECOM Managing Director – New Zealand.
Over the same six month period, optimism within the buildings market has improved. Nationwide, 59 percent of respondents have a positive outlook for investment expectations, up 7 percentage points on AECOM’s last survey.
Positive sentiment is particularly strong in the Upper North Island, with 97 percent of respondents anticipating growth to continue. Pressure on Auckland’s housing market and the region’s foreseeable growth can be attributed to the continuing regional growth trend.
Skills and materials shortages remain one of the industry’s most significant and persistent challenges. New Zealand faces ongoing difficulties in increasing the volume of workers with technical capabilities and, by extension, contributing to a more productive, skilled workforce. A focus on improvements in this area has the potential to lift the overall well-being of the country.
Focus on Auckland: the Super City, housing and liveability
Nearly five years after the amalgamation of Auckland’s seven councils into one, more than a quarter of respondents view City Planning, Community Engagement, and Infrastructure Development as above ‘average’, a reflection of the city’s commitment to address transport and congestion.
However, Sentiment respondents indicate there is still much to be done to improve the performance of the Super City. Close to 40 percent of survey respondents rate the city’s performance ‘below average’ to ‘poor’ in all but one area.
Significantly, half of all respondents see the city’s Financial Management as ‘below average’ to ‘poor’. The rating of Auckland Council’s performance in this area has worsened since AECOM’s previous survey.
Respondents were asked what key factors they believe might address Auckland’s housing crisis. Across the board, results were up from those six months ago, a reflection of the scale of the issue. Three principal factors rated highest – urban intensification, diversity in housing size and availability of land. Two factors having the biggest increase compared to six months ago were increasing assistance from first time buyers and restricting foreign ownership.
With Auckland’s goal of being the world’s most liveable city, industry respondents were asked to rank New Zealand’s biggest city on a range of factors. Transport and Governance rate as the key factors needing improvement for more positive liveabi…