The construction industry is a cornerstone of any thriving economy, and Auckland is no exception. Given the city's rapid development,impending elections, and challenges from recent global events, under standing the sentiment within this vital sector is more crucial than ever. To gauge the current outlook and expectations, we conducted a survey that taps into the thoughts and opinions of industry professionals. This blog post will dissect the survey results to shed light on the prevailing mood in Auckland's construction industry.
The survey was conducted online and distributed via email to our customer database. We received responses from professionals in the industry, including both business owners and employees. Our respondents represent various sectors, including infrastructure, commercial construction,and land development. The questionnaire included both multiple-choice questions and an open-comment section.
Its worth mentioning that the sample size is limited. With 41 respondents we won't be claiming a PhD with our sample size. And, we are much better at hiring construction equipment than data analysis.
The survey focused on three key questions:
Do you believe that the current market for the construction industry in Auckland will improve, remain the same, or deteriorate over the next 6 months?
Do you anticipate that the general situation in your business will improve, remain the same, or deteriorate over the next 6 months?
Do you have any additional comments on the current state of the industry in Auckland?
34% of respondents believe that market conditions will improve over the next 6 months, while 24% think conditions will deteriorate.27% expect things to remain the same, and the remaining 15% are unsure.
The consensus suggests that conditions will either improve or remain the same. Given that we're in August, at the onset of the construction season, this makes sense. Often, winter serves as the true test of market conditions. Perhaps winter 2024 will provide a more definitive gauge.
49% of respondents are optimistic about their businesses improving over the next six months. 10% anticipate a decline, 31% expect no change, and the remaining 10% are unsure.
A higher percentage of respondents are optimistic about their own businesses compared to the industry at large. This could be because they have a clearer view of their upcoming projects.
This optimism aligns with the industry sentiment survey we conducted in Q4 2021, which showed a general sense of optimism, albeit from a lower baseline due to the COVID-19 pandemic.
Upcoming elections and council changes in Auckland have led to hesitancy among stakeholders, delaying new projects. However, there is a shared belief that a change in government could positively impact the industry in the latter half of 2024.
Several respondents expressed concerns about the upcoming Official Cash Rate (OCR) announcement. High construction and finance costs have stalled many projects. Meanwhile, public sector budgets are expected to be rerouted to address weather-related damages.
There is a general consensus that large, publicly-funded projects will support the industry, particularly for contractors involved in these initiatives. However, a decrease in private and residential work is anticipated.
The industry is experiencing a talent shortage, lacking skilled staff across all levels. This is a pressing issue that requires immediate attention.
Some respondents noted that the industry is fluid, balancing itself among commercial, residential, and infrastructure projects. Additionally, there's a trend toward engaging in clean-up and insurance work,especially on the west coast.
Overall, our survey paints a cautiously optimistic picture for Auckland's construction industry. While challenges exist, opportunities for growth are also evident, particularly in public sector and large infrastructure projects. Business owners appear more optimistic about their prospects,possibly due to a clearer understanding of their own work pipelines.
As we approach a busy construction season, it will be interesting to see how these sentiments evolve, especially considering the political and economic uncertainties ahead. For now, all eyes are on the upcoming election and OCR announcement, as these could be pivotal in shaping the industry's future.
Stay tuned for updates, and thank you for participating in this valuable industry survey. Your insights are crucial in helping us understand the pulse of Auckland's construction sector.