Record levels of activity in NZ’s construction industry

Salary growth cautious despite record levels of activity in NZ’s construction industry

New Zealand’s construction workforce is set to receive moderate salary increases of less than five per cent in their next review, despite the sector being in a period of sustained growth. That’s one finding from the 2016 Hays Construction & NZIOB (New Zealand Institute of Building) Salary Guide, released today.

The guide reveals salary and recruiting trends for New Zealand’s building industry. It found that when they next review salaries, 36% of employers will offer increases of up to 3%. A further 26% will receive an increase of between 3 and 5%. A lucky 15% will receive between 5 and 10% with an additional 3% set to receive a raise of greater than 10%. However 6% do not intend to increase salaries at all.

Looking at the year that was, 34% of employers increased salaries by less than 3% and 32% made increases of between 3 to 5%. 23% increased salaries between 5 and 10% and 4% raised them by more than 10%. The final 7% did not increase salaries at all.

It also found that two thirds (66%) of respondents intend to increase permanent headcount over the coming year, while 45% will increase their use of temporary workers to match the insatiable appetite of New Zealand’s construction sector.

Unsurprisingly skill shortages are evident with 75% of employers saying it is ‘very difficult’ or ‘hard’ to recruit Senior Managers. This is followed by Project Managers (72%), Estimators (68%), Forepersons (65%), Quantity Surveyors (64%), Site Managers (62%) and Leading Hands (51%).

At the other end of the scale, 86% of employers say it is ‘easy’ or ‘manageable’ to recruit Cadets and entry-level candidates. Architects (63%) and Engineers (54%) are also fairly simple to recruit.

In other trends, management roles have become more diverse with the number of women at this level increasing to 18% from 13%. Meanwhile 77% of employers say business activity increased over the past year, and in the next 6 to 12 months 51% say the general economic outlook will strengthen.

Speaking of New Zealand’s construction sector, David Cleet, Senior Manager of Hays Construction, said: “We’re seeing a period of sustained growth with activity at record levels. Auckland’s residential building market is struggling to keep pace with demand, sparking record house prices. In part this has been caused by record migration as well as the Australian market turning off the tap on the brain drain. Add to this a commercial boom, with more high value projects in planning or under construction than ever before, and Auckland’s market is certainly leading the way.

“Christchurch is moving away from earthquake repair to more commercial new build work with construction spend at record levels even though activity is down - however the peak is still to come. Meanwhile there’s been a modest pickup in activity in Wellington, with a rise in new build apartments under construction.”

Malcolm Fleming, Chief Executive Officer of the New Zealand Institute of Building, says: “The guide tells the story of an industry that is more cautious than it was 12 months ago, despite the $176b of construction work forecasted for the period 2016 to 2020 (MBIE). This increased level of cautiousness, and the modest salary growth reported in the past twelve months, indicates that construction is planning to be a robust and sustainable industry. This signals a maturing of our sector, which bodes well for all those in, or entering the construction industry.”

The guide also includes typical salaries for a range of roles based on location, project size, construction type and annual turnover.

For your copy of the 2016 Hays Construction & NZIOB Salary Guide please visit https://www.hays.net.nz/cs/groups/hays_common/@nz/@content/documents/digitalasset/hays_1320681.pdf

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