New Zealand’s construction sector is booming*. Christchurch needs rebuilding, and Auckland keeps growing. If you’re in construction, the future appears to hold promising opportunity.
But it’s not the same year to year or even week to week. Challenges change from project to project. You need banking that helps you manage your cash when times are good, and when they’re lean. Our people can help get you sorted.
*Source: Building consents issued October 2015, Statistics New Zealand.
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“The market is booming but profits are getting leaner…”
Recent research from ANZ signals increased risk for the construction sector around cash-flow over the next 6 – 12 months.
ANZ Client Insights and Solutions manager Bevan Holdaway said while confidence in the construction sector was still strong, there was a need to remain cautious of circuit breakers at this point in the economic cycle.
As a large banker of the New Zealand construction sector ANZ conducted the research to identify issues facing construction firms that customers might not be aware of.
“The combination of a strong economy, record migration, and the shortage in the residential housing market should continue to provide demand in both the residential and non-residential pipeline. However, despite record levels of activity profit margins are getting leaner.” Mr Holdaway said.
INDUSTRY TIPS & CASE STUDIES
Head of ANZ Insights and Complex Lending Andrew Pryde says the combination of flattening property prices and a significant spike in building costs means developers and building companies are struggling to see how some of the numbers work – a view shared by the banks.
The current environment has challenges. Among these is finding ways to turn buoyancy into a platform for sustainable growth and avoid the ‘boom and bust’ cycle that has characterised the industry.
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