Survey shows there’s still plenty of life in the construction sector post-COVID

Survey shows there’s still plenty of life in the construction sector post-COVID
Published: 28 July 2020

A significant group of the New Zealand construction sector feels the industry is faring ‘Better than Expected’ in the results of a survey of specifiers conducted by Construction Marketing Services.

While the survey showed that most businesses across all industry sectors had seen a ‘Moderate’ impact on their business, with ‘Cashflow’ issues and ‘Fewer Clients/Projects’ being the main areas of impact, many were holding steady with a ‘Moderate’ pipeline of work lasting at least ‘Until the end of the Year’.

In the key question of ‘How do you think the Industry is Faring?’, just under 72 percent of respondents felt that the industry was doing ‘As Well as Expected’(41%), or ‘Better than Expected’ (30%), with only (8.7%) ticking the ‘Worse than Expected’ box.

Different sectors showed different levels of confidence in the survey.

In terms of the Impact of COVID-19, Trades were more likely to claim a ‘Moderate’ or ‘Significant’ impact (85%) followed by Developers and Electricians (both on 80%) – Architects and Engineers were more likely to claim ‘Low’ or ‘Nil’ impact on their business (35% and 32%) respectively.

While many in the Trades were unsure about their pipeline of work beyond three months (39%), a significant proportion of Developers and Engineers were looking strong for more than 12 months or more (45% and 27% respectively).

Ian Watt, General Manager of Constructing Marketing Services says that the survey reflected that the industry largely hasn’t yet seen a big drop-off in business, but “I think they’re cautious that could still come yet,” he said.

“All the media commentary says there’s a lot more to play out and that businesses need to brace for impact. But what we’re actually seeing is that there is still a solid pipeline of work and there’s plenty of potential that industry confidence is going to rebound quicker than expected,” Watt said.

“That’s the thing that frustrates me. We saw this through the GFC (although this is much more substantial than the GFC), those who take the position they’ve just got to batten down the hatches and wait for it to blow over – in my opinion, taking that approach, they could perish.

“You need to be proactive. Absolutely, get smarter about how you run your business and manage your operating expenses, et cetera – which everyone’s been forced to do. But you still need to keep finding a way to get your company known and build your market share. So that when there is that up-turn in a few years, you hold on to that share and can really profit from it,” he said.

A second part of the survey addressed changes in the way specifiers were doing business Post-COVID and showed unanimously the industry was looking forward to human contact again.

A near unanimous 69% of all respondents stated they were looking forward to ‘face-to-face meetings’ and 83% were looking forward to ‘attending industry events’.

With that said, the video meeting still has its place with around 80% of respondents increasing their use of Skype/Zoom/Teams or similar platform, led by Architects and Engineers (81% and 71% respectively).

Watt says he wasn’t surprised by these results. “Architects and Designers are historically very comfortable working remotely and probably more likely to embrace digital technology than the rest of the industry.

“I think the biggest impact of COVID is that we’re an industry that is often slow to adopt to new technology, so the way we embraced new thinking about how we communicate with each other, and the frequency of contact, may actually have produced a huge productivity gain for the industry.

“And we see that continuing. There’s definitely an appetite to get back to those social engagements, but I think we’ll continue to see a continuing blend of digital video and face-to-face meetings,” he said.

CMS has its own example of this – having to replace international speakers at their popular trade events. Instead they’re pulling together thought leaders from the design fraternity, “getting them to communicate what they’re seeing and reading and following and experiencing around what a post-COVID world might mean for the design and construction of buildings in New Zealand”.

“I think there’s a lot of people that say, ‘Oh, business will just get back to normal and nothing will change,’ but if you read industry commentary at the moment, there’s a lot more around the ‘work-from-home scenarios’ and we’re more interested in green materials and livability than ever before,” Watt says.

“I think people are more aware around hygiene and contact with other people and working environments. So, I think you’re going to see there will be changes to, not just commercial buildings, but also apartment buildings. I’m interested to see what people are forecasting and perhaps even modifying the stuff they’ve got on their drawing board now.”

Watt says that CMS membership is staying strong, and use of their online specification tools, Productspec and Smartspec, are at the highest rates seen for some time. Attendance at their CONZTRUCT events this week, the first held since lock-down, were also higher than 2019 levels.

“We’re really fortunate and should be grateful we’re in this industry because there are some industries in serious trouble and could be for a long, long time – tourism and hospitality, et cetera. But the construction industry is a robust industry. We’re used to peaks and troughs, and we’re resilient.

“So, we see our role as trying to keep everyone together, keep communicating and trying to keep thinking positively around how we can help you grow your share. If you have quality products, how do you make sure that those are the ones that are being used in those projects and contributing to evolving design trends?

“I think it’s because we’re fortunate enough that we’ve been around a long time, and because we’re connected to some really important construction firms, designers, and developers, we’ve been able to communicate with suppliers, about what projects are still forging ahead. People see us as a really important conduit – to stay connected to that activity in a time of uncertainty.”

“I think that’s an important thing for people to say is, well, we know there’s activity happening. Let’s try and be proactive around how our business is going to get connected with those construction opportunities – not just wait for it to come to us.”