Keep sight of NZ vision for the future
Building resilient cities that improve quality of life is no easy task. But creating the best legacy for future generations must be a priority writes New Zealand business lead Craig Davidson in a new report.
With rising expectations of investment in buildings and infrastructure balanced by concerns about skills and materials shortages, the construction industry in New Zealand is braced for challenging times. That’s according to the country’s 2018 AECOM Infrastructure and Buildings Sentiment Report. As context, the backdrop for this year’s sentiment survey sees the industry steer its way through the settling in of a new government, a shift in infrastructure priorities, a growing population and more.
Our survey highlights some clear themes that respondents see as being essential to driving growth and development. These include strong leadership, clarity of purpose and a unified vision that is both bold and innovative. The need for greater clarity around projects and the development of more efficient funding and procurement models are also seen as critical drivers for success in 2018.
Market wobble
New Zealand’s infrastructure market remains optimistic; however there has been a softening across the country since our survey a year ago. Key drivers of the decline in sentiment over the past 12 months are the markets desire for improved confidence in the pipeline of projects coming to market and transparency around funding. The buildings market has seen a significant decline in positive outlook, most notably Christchurch. Respondents echo sentiment from 2017, indicating that issues around the funding of projects are becoming an increasing concern.
Workload expectations in the country’s infrastructure market are up slightly on our previous survey with more than 70 percent of respondents expecting investment levels to remain steady or rise over the next three years. However, optimism has softened for the delivery arm and at a regional level. Expectations in Auckland have softened for the first time in four years, while Hamilton and Wellington have experienced a subtle decline in those with a positive outlook. Christchurch is continuing its downwards pattern, which is likely reflective of the major infrastructure projects due for completion in the next two years and an unclear outlook into further prospective projects.
Loss of confidence
Sentiment in the vertical market is experiencing a significant softening, with all regions reporting less confidence in the forward workload. Of note, Christchurch dropped by nearly 20 percentage points from our last survey with respondents now expecting an overall decrease in the workload over the next year. There is a clear need to take a step back and redefine what success is going to look like for the city, with respondents expressing a need for increasingly strong leadership to drive progress and a cohesive vision to move forward.
Over the last decade, New Zealand’s population has grown by more than half a million people, half of which was during the last three years. With this rising population, the country is facing increasing demand in both the horizontal and vertical sectors. This demand needs to translate into confidence from the industry to invest in the resources required in the short to medium term. At the same time, it is imperative that a resilient long term plan is implemented based on unified vision and driven by strong leadership.
Call to action
With the Infrastructure and Buildings Sentiment Survey in its ninth year, we are continuing our mission to gather valuable industry insights and to ensure we are well equipped to tackle the challenges and opportunities that arise as modern cities evolve and nations grow.
Our survey highlights some clear themes that respondents see as being essential to driving growth and development. These include strong leadership, clarity of purpose and a unified vision that is both bold and innovative. The need for greater clarity around projects and the development of more efficient funding and procurement models are also seen as critical drivers for success in 2018.
Also in this year’s report :
How important is having a clear vision as we build for future generations?
How is industry aligning itself with the shifting objectives of a new government?
Looking to the future: Changing people’s perception to meet the demands of a growing population
Addressing procurement: Developing innovative models as a way forward
Building sustainable futures for our cities: Are we as resilient as we think we are?
To download a pdf of the full report click here.