Market sentiments: AECOM Infrastructure and Buildings Sentiment Report 2018

AECOM recently published the results of its 2018 Infrastructure & Buildings Sentiment Survey. Now in its ninth year, the results are intended to contribute to an industry-wide conversation on how to best tackle the biggest challenges facing the construction industry. A full copy of the Report can be downloaded here.

We highlight some of the key themes arising out of AECOM’s Report below.

Infrastructure market

The majority of respondents surveyed expect spending and workload in the infrastructure market to remain steady or increase over the next three years driven by the demands of a growing population. However, respondents expressed a desire for improved confidence in the pipeline of projects going forward, particularly in Christchurch where a number of key road and rail projects are due for completion in the next two years.

The new government’s priorities around infrastructure development are reflected in the shift in respondent’s optimism around work expectations away from roading to rail projects.

Buildings market

The survey results demonstrate that respondents recognise significant expenditure in vertical infrastructure is needed to deliver on the government’s ambitions around housing, healthcare and education. However, respondents highlighted a complex range of challenges facing delivery of these projects, including concerns around funding, cost escalation, procurement inefficiencies and a lack of resources and skills to meet demand.

This has had the effect of moderating respondent’s sentiment in the expected workload across all regions and the majority of sectors in the buildings market, with the exception of healthcare.

Tackling industry challenges

Given the widely publicised capacity constraints in the construction sector, it is no surprise that a shortage of skills and materials tops the list of the most critical challenges perceived to be facing the industry. The general consensus of respondents is that the solution to these challenges does not lie with the adoption of big data and smart technology, at least in the short term. This is in contrast to New Zealand’s global counterparts who are embracing technological advances as critical drivers to change.

The development of more-efficient funding and procurement models are considered critical to growth, with a number of respondents seeing partnership / alliance models as holding the most value as a form of procurement, primarily because of the method’s ability to allocate risk fairly across the parties involved.

Where to from here?

Respondents consider strong leadership and clarity of vision to be essential to driving growth and development in the construction industry. Rather than being reactive in nature, infrastructure planning needs to be driven by bold and innovative leadership operating above political party lines. Respondents consider this is imperative to leaving a legacy of resilient, sustainable and future proofed buildings and infrastructure in cities and regions across New Zealand.

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