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NZ Construction News: Business beyond the boom

Thriving during what's regarded as the longest and strongest growth phase in building activity in New Zealand history is one thing, but building a sustainable business to last beyond the construction boom is another. 

We’re currently in what’s being described by some as the most dangerous time in the construction cycle. Amidst the abundance of work that’s out there, some contractors and subcontractors have been over-trading, leaving themselves unable to live up to their promises and resulting in project delays and reputational damage.

Alongside this, some operators aren’t accurately factoring material cost escalation into their bids, which in a matter of weeks can turn what was a profitable job into an unfeasible one. This can lead to severely reduced profit margins and in some instances has reportedly put some firms on the slippery slope to insolvency.

With developers increasingly looking to offload risk to contractors and subbies via lump sum agreements, and project delays on the rise, accurately forecasting material and labour increases is imperative to running a sustainable business.

So, even though the sun is still very much shining on the construction industry, how do you position your business to be profitable beyond the current boom?