INDEPENDENT NEWS

Construction looks to build on the good times

Published: Tue 22 Sep 2015 11:29 AM
Construction looks to build on the good times
The building boom in Auckland and Christchurch has provided a sustained upturn for the construction sector, but highlighted the risks that come with rapid growth, new ANZ research reveals.
The annual ANZ Privately Owned Business Barometer survey (in the first half of 2015) found the sector was generally optimistic and participants were taking a range of approaches to lay the foundations for sustainable growth, regardless of demand.
But despite a significant increase in work and revenues, some construction businesses were failing or finding profitability stayed the same as in more difficult times.
Respondents said maintaining reasonable margins on every job – and not chasing volume at the expense of profitability – was essential for a strong business in good times and bad. Careful cash management and building strong relationships were also key.
Common issues that led to problems when businesses got busy include jobs not being priced, invoices not being issued in a timely manner creating cashflow problems, too much focus on certain clients leaving the business overly exposed and taking on a too-large project for the business owner’s equity meaning losses can’t be absorbed.
Key findings
• 30% of Construction sector respondents said lack of staff has definitely impacted their business, compared with 18% of all survey respondents.
• Only 16% have boards compared to the Barometer average of 25%.
• When it comes to benchmarking against similar businesses, 15% said they do this annually while 28% said they never benchmark.
• Around 30% of survey respondents said mobile technologies had totally changed their business, 20% of respondents reported that it had made little to no real change to their business.
• 20% of construction respondents said environmental considerations bring significant extra costs (compared to an average of 9% for all businesses)
“In a sector whose fortunes are heavily impacted by the ups and downs of the wider economy, the number of firms building resilience is a positive development,” said Graham Turley, Managing Director Commercial & Agri at ANZ.
“Growth comes with challenges, and without strong business and financial disciplines businesses run the risk of becoming victims of their own success.”
ENDS
ANZ Bank
Get on top of your money
ANZ has been helping New Zealanders get on top of their money ever since we opened for business in 1840. We were New Zealand's first bank and today we have a large network of full-service branches and ATMs, and talented people across the country.
We're passionate about helping our customers make their money work harder and equipping them to make better financial decisions. Whether it's travelling the world, buying a home, building a business, investing for the future or protecting their family's future, we use our financial strength and expertise to help make it happen.
Through our sponsorships, our Staff Foundation and thousands of staff volunteer hours each year, we support causes that make a difference to New Zealanders.
Contact ANZ Bank
Website:
Phone:
0800 269 296

Next in Business, Science, and Tech

General Practices Begin Issuing Clause 14 Notices In Relation To The NZNO Primary Practice Pay Equity Claim
By: Genpro
Global Screen Industry Unites For Streaming Platform Regulation And Intellectual Property Protections
By: SPADA
View as: DESKTOP | MOBILE © Scoop Media