The results are in: BDO’s latest construction survey report

BDO New Zealand recently undertook a comprehensive survey of almost 100 New Zealand construction companies, with the aim of providing a useful insight into the reality of the New Zealand construction sector as it stands today. A full copy of the report containing the survey can be found here.

The survey results highlight some clear challenges facing the construction industry today. Nevertheless, the industry remains largely optimistic growth rates will continue to rise, fuelled in part by the government’s ambitious plans for housing and infrastructure over the next decade.

We summarise some of the reported highlights and challenges below.

Key Recommendations

Companies should consider:

1. Obtaining legal advice on the recently enacted mandatory retention regime (via the Construction Contracts Amendment Act 2015).

   The regime appears to be poorly understood in the industry, which can lead to future retentions issues.

2. Using their permitted rights under the Construction Contracts Amendment Act 2015 to inspect their clients’ trust records in order to confirm that any retentions are held in trust.

   10% of companies surveyed identified at least 1 client that was not holding retention funds on trust, or did not have a legally compliant alternative instrument in place, such as products being offered by some insurance providers. See our article on retentions here.

3. Using recruitment agencies to address their staffing issues.

   The report found that companies who used agencies experienced less trouble meeting their recruitment needs than those who rely on word of mouth or do their own advertising.

We recommend you read the Full Report for a comprehensive understanding of the current state of the industry. For advice on any of the issues arising out of the Construction Contracts Act, contact one of our experts.