Construction industry losing confidence over lack of govt work

The construction industry is losing confidence, amid rising concern about the lack of a clear pipeline of government work in the immediate future.

The 2024 Construction Industry Survey by Teletrac Navman commissioned by Civil Contractors - found just one in five contractors have confidence in the outlook, which compared with a third last year.

A third expected to see revenue growth this year, compared with 47 percent in 2023, 52 percent in 2022 and 55 percent in 2021.

Civil Contractors chief executive Alan Pollard said the industry was facing a severe lack of work, which was affecting 64 percent of businesses, compared with 29 percent in 2023.

"There has to be change, and we've certainly told the relevant government ministers that there is a crisis unfolding right now," he said.

Pollard said other challenges facing the industry was a lack of a clear work pipeline, cost increases and supply chain issues.

"We strongly support (the government's) medium to long term vision. It's certainly what New Zealand needs."

However, he said the industry needed support now to reduce red tape and get working.

The survey found difficulties with local and central government procurement guidelines and work consent conditions affected 57 percent of businesses, up from 36 percent in 2023.

Rising compliance costs, such as temporary traffic management and health and safety protocols affected 71 percent of businesses, while 64 percent reported project cost overruns.

"Right now, we need assistance with contracts coming to market. We can't be in the same place in 12 months' time," Pollard said.

"Already at the moment, contractors are restructuring, they are shedding staff, and they're parking up equipment that is surplus to requirements."

The survey indicated just 39 percent of businesses expected staff growth in 2024, which was a decline from 54 percent in 2023 and 63 percent in 2022, with 12 percent of businesses expecting to cut staff numbers this year.