Confidence is one of the key determinants for decisions about future investment and business decisions, whether for individuals or companies.
The BNZ recently released its first Confidence Survey since April 2014. This highlights the issues in the economy from dairy prices to the construction industry, and is well worth a read. The individual responses are summarised so you can see how various respondents describe the industry.
Some of the key factors that appear to be affecting the New Zealand construction industry are:
- While construction around Auckland is booming, comments suggest the rest of New Zealand is starting to plateau or facing soft market conditions.
- Some public projects are being reprioritised in the face of increased costs, which reduces opportunities for construction companies.
- Project resources are stretched, it is a challenge to recruit experienced staff and subcontractors, whose services are in demand.
- There is increasing caution around ‘new players’ and managing potential bad debts.
As the economy starts to slow in the next few years, businesses will start to face a real risk around changing demand for services. In construction this will see even more focus shift to Auckland and is likely to cause tensions around the rest of the country.