Meeting challenges and taking charge of the future
The latest research from credit reporting agency Centrix shows that more than 600 companies in New Zealand have filed for liquidation so far this year, an increase of 35% on the same period last year. Construction has been the hardest-hit industry. In the first 5 months of last year, 116 construction companies were liquidated; this year, that figure has jumped to 199, an increase of 72%. Building Industry Federation chief Julien Leys said that, although the industry's current difficulties are less severe than during the global financial crisis in 2008, “the pain is still there”. Faced with inflation and high interest rates, “some people may not have managed their cash flow well and are therefore facing insolvency”.
Over the past few years, New Zealand's construction industry has faced a range of challenges: rising interest rates, supply chain disruptions, skilled labour shortages and shrinking margins. The resulting surge in insolvencies has put unprecedented pressure on construction businesses.
In recent years, however, construction management software company Procore has helped countless construction businesses in Australia and New Zealand turn things around in a harsh market, converting large volumes of market information into productivity and business opportunities for the industry.
Procore Director of Solutions Consulting, Asia Pacific
Will Twomey
Leading the way in technology:
A must-download app for the construction industry
To help construction businesses tackle these challenges, Procore has released its annual industry benchmarking report, How We Build Now, to support business owners in addressing difficult issues. Procore's Asia Pacific Director of Solutions Consulting, Will Twomey, says the company understands the power of big data as a barometer of the industry. But unstructured data without insight is meaningless, so its market reports help construction companies turn information into market insights and data into more business.
Now in its fourth year, How We Build Now continues to expand its scope. This year, Procore partnered with independent research agency YouGov to survey more than 1600 construction leaders across Asia Pacific, producing two reports: one covering Australia and New Zealand (ANZ), and the other covering Malaysia, the Philippines and Singapore. The report can also be read on a phone by downloading the mobile app.
The How We Build Now mobile app
Managing rising costs and maintaining healthy cash flow were identified as the two biggest challenges facing the construction industry in Australia and New Zealand. Twomey says the findings are unsurprising and reflect the wider economic environment. Inflationary pressures, fluctuating material prices, rising labour and energy costs, and increased regulatory compliance requirements have all driven costs higher. “In a volatile market, construction businesses are now looking for strategies that make every project more predictable, which means basing their decisions on data.”
41% of respondents in Australia and New Zealand believe
improving access to project information is the leading strategy for increasing productivity
Twomey says construction management platforms will be the leading technology driving change over the next three years. The report shows that more than half of respondents in Australia and New Zealand (51%) intend to invest in a construction management platform. He believes these platforms address several pain points, enabling data-driven decisions by capturing and analysing project data in real time, while encouraging collaboration and communication among project stakeholders. Thanks to their scalability and ease of use, companies that invest in construction management platforms such as Procore stand to benefit from improved productivity, risk management and insight.
Indeed, construction businesses urgently need integrated construction management platforms such as Procore to make effective use of their data. These platforms connect information across all projects, helping construction leaders base their decisions on real-time data. Procore has become a leading management system in the Australian and New Zealand construction markets, consistently ranking among the top two by market share. It has become a preferred choice particularly for managing small and medium-sized projects. More than 200 construction businesses in New Zealand currently use Procore.
Prostone Consulting: guiding the path to success,
A consultancy that can help you turn things around
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So the question is: How can New Zealand construction businesses benefit from the Procore construction management platform? Here is an opportunity: Prostone Consulting Limited is New Zealand's only Procore-certified consultancy. As a multidisciplinary consultancy, it provides a comprehensive range of advisory services, including property investment, development management, project management, design management, construction planning, ECI, value engineering and construction management. Alongside its construction industry knowledge, it can help projects gain the full benefits of Procore during delivery. As a consultancy serving the Chinese property development and construction market, Prostone can also communicate seamlessly with Chinese construction businesses.
Success story: an industrial project in South Auckland
Babbage Consultants is the design consultant for a South Auckland industrial project comprising an industrial facility on a site of approximately 13,000 square metres. In early 2021, the client appointed Prostone as its project management and quality assurance consultant. Acting on the client's behalf, the Prostone team managed the design process and the resource consent and building consent approvals, obtaining resource consent within 4 months and building consent within 3 months of resource consent approval.
Babbage Consultants project director Paul Duder offered this assessment of the Prostone team:
Prostone takes a collaborative approach, consistently working to bring the project team together to deliver projects around shared goals. They solve problems proactively and listen to team members. The Prostone team communicates well and has a positive working culture. They recognise consultants' professional skills, knowledge and experience and communicate these effectively to the client.
Alex, the client's representative on the South Auckland project, was impressed by Prostone's project management approach: “Prostone does more than simply ask what a client needs and then get straight into the project. First, they analyse the client's needs and establish a shared understanding. They then provide an excellent project delivery plan and keep the client informed of progress throughout. They also regularly go out of their way to help us in areas other project managers would not touch, such as market research, capital planning and value engineering.”
Looking ahead: a major apartment project
Shundi Group project director Frank Xu said of the Prostone team: “Prostone was involved in Stage 1A of Shundi's Te Tauoma development, comprising 3 apartment buildings and 1 car park building. During the design process, Prostone provided professional quantity surveying (PQS) services, assisting us and the design consultants with cost planning, budget estimates and value engineering. Their registered QS has extensive knowledge of apartment projects and strong industry relationships with suppliers and subcontractors. I was also impressed by their rapid response to design issues.”
Q Designz director Mark Foo said Q Designz was the structural engineer for the apartment buildings in Stage 1A of Te Tauoma and had also worked with Prostone on other projects.
We have worked closely with Prostone on several apartment and hotel projects. The Prostone team consistently takes a project-focused approach, working to maximise project outcomes and enhance overall value. They can identify client requirements and communicate them effectively to the design team, ensuring expectations are clear. Their team has also shown strong leadership in progressing design, ensuring transparent decision-making, working within clients' financial and programme constraints, and reducing potential project risks.
Prostone's Sid Noah explained: “All Prostone projects use Procore, including commercial developments, apartments and townhouses. Project teams, including main contractors and subcontractors, design consultants and developers, communicate and collaborate through Procore, greatly improving efficiency and accuracy. We use Procore to manage every aspect of project management, including drawings, meetings, all communications, RFIs, CIs, safety and cost management.”
Understanding challenges and identifying strategies:
A must-attend construction industry event
This raises another question: what if your business is also struggling and looking for effective ways to reduce costs and improve project management efficiency? The New Zealand International Building Expo & Summit (NZIBES), taking place in August, is a construction industry event you cannot afford to miss. According to the latest news from the organising committee, a large number of new and returning construction-related businesses and brands will appear at this year's exhibition.
NZCBIA president Frank Xu recently said that this is the first year since the end of the COVID pandemic. With New Zealand's borders fully reopened, he believes many overseas brands and products are eager to enter the country's construction market, bringing fresh energy to the local property and construction industries. In today's New Zealand property market, gaining clear market insights, understanding industry developments and building wider connections have become pressing needs for everyone in the sector. Guided by the principle of “Connecting north and south, building success together”, NZIBES provides an efficient platform for construction and property businesses and industry professionals to connect.
Over the past several years, NZIBES exhibitions have attracted countless businesses and brands connected with New Zealand's property and construction industries. Alongside leading domestic and international construction and building materials brands and products, exhibitors have included developers, builders, real estate agencies, and insurance, finance and legal firms, providing a comprehensive network of supporting services for the industry.