NEW ZEALAND Q2 2016 · q2 2016 vs. q2 2015-8.5% quarter on quarter change q2 2016 vs. q1 2016...

NEW ZEALAND Q2 2016

BCI PIPELINE REPORT NEW ZEALAND - Q2 2016 2

About BCI Pipeline Report

Headline Project

Work Entering the Pipeline:

Concept + Design Stage Projects Q2 2016

Overall Picture

By Category

By Region

New Zealand Economic Overview July 2016

Key Indicators

Disclaimer

BCI Economics Services

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3 BCI PIPELINE REPORT NEW ZEALAND - Q2 2016

BCI Economics is the centre of market intelligence within

the BCI Media Group. BCI reports on well over 200,000

construction projects in 12 regional markets including

Australia, New Zealand, Singapore, Indonesia, Malaysia,

Thailand, Vietnam, Singapore, Hong Kong, and since

2013, Cambodia, Laos, and Myanmar. With highly qualified

team members on the ground in 25 offices across the

region, BCI has unparalleled access to live construction

data going as far as 10 years back and two years ahead.

The BCI Pipeline Report provides quarterly leading

indicators of the value of new construction projects in their

early stages (from competition to documentation). It is an

essential source of construction information for any

organisation or individual connected or concerned with the

future of the construction industry in New Zealand.

The BCI Pipeline Report offers more than just a general

view of the construction market by revealing specific

trends at regional and category levels.

However, as well as providing “the bigger picture” by

region and by category, the BCI Pipeline Report can be

used in conjunction with LeadManager to focus on and

take advantage of areas of opportunity. This will be of

particular relevance to clients who need to have their

products considered in the early stages of a project.

With this in mind, on the next page we have profiled a

‟Headline Project‟ from a promising Building Category to

illustrate how the BCI Pipeline Report can benefit your

organization as a sales resource as well as a planning tool.

BY REGION

Upper North Island

Comprising:

Auckland; Bay of Plenty;

Franklin; Manukau; North

Shore; Northland;

Papakura; Rodney;

Waikato; Waitakere

Lower North Island

Comprising:

Gisborne; Hawkes Bay;

Manawatu-Wanganui;

Taranaki; Wellington

South Island

BY CATEGORY

Building

Residential

Community

(incl, Recreation, Legal and

Health)

Education

Office & commercial

Industrial

Retail & Hospitality

Civil

(Incl. Infrastructure,

Transport and Utilities)

METHODOLOGY

The data in the BCI Pipeline Report is based on

projects reported on a daily basis in BCI Asia‟s

real-time project lead database. For the past nine

quarters all projects at „competition‟, „concept‟,

design‟, or ‟documentation‟ stage were extracted

from the database, by publishing date. Only „new‟

projects (projects reported for the first time) are

included. The aggregate value of the projects is

then established, by quarter.

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BCI PIPELINE REPORT NEW ZEALAND - Q2 2016

CONCEPT & DESIGN STAGE RESIDENTIAL PROJECTS ($Mn) - including Aged Care

The busy Residential market has been hitting the headlines but it is clear from the level of new proposals

that developers see plenty more scope for some time to come.

Project reference PID 98465017 was one of those new projects we reported and if your company has products or services relevant to this sector, this would be an opportune time to contact the key decision makers on the project.

PROJECT SNAPSHOT

Project ID: 98465017 - The Verve

Approximate Project Value:

$50 Mn

Address: 52 Peterborough St Christchurch Cen-tral NZ

Status: Resource Consent Approval Granted

62 x 2 & 3 bedroom apartments

Including:

Aluminium framed windows & doors

Air conditioning

Joinery & cabinetry

Double glazing

Lifts

+24.0%

YEAR ON YEAR

CHANGE Q2 2016 vs. Q2 2015

+144.4%

QUARTER ON

QUARTER CHANGE Q2 2016 vs. Q1 2015

211

1204

656

355

940

852

679

477

1166

0

200

400

600

800

1000

1200

1400

II 2014 III 2014 IV 2014 I 2015 II 2015 III 2015 IV 2015 I 2016 II 2016


CONCEPT & DESIGN STAGE

PROJECTS Q2 2016


TOTAL CONCEPT & DESIGN STAGE PROJECTS IN NEW ZEALAND ($Mn)

Following a general decline since early 2014 - punctuated by a spike in Q2 2015 mainly attributable to the release of

the draft plan for the Lyttleton Port recovery (PID 79296017) - early stage projects have recovered to healthy levels

with roughly a 60:40 balance between Building and Civil construction.

-7.6%

YEAR ON YEAR

CHANGE Q2 2016 vs. Q2 2015

-2.8%

QUARTER ON


3315 32663024

2558

3859

1461

2421

3667 3565

0

500

1000

1500

2000

2500

3000

3500

4000

4500



CONCEPT & DESIGN STAGE BUILDING CONSTRUCTION PROJECTS ($Mn)

CONCEPT & DESIGN STAGE CIVIL CONSTRUCTION PROJECTS ($Mn)

-11.2%

YEAR ON YEAR

CHANGE Q2 2016 vs. Q2 2015

-9.3%

QUARTER ON


-1.4%

YEAR ON YEAR

CHANGE Q2 2016 vs. Q2 2015

+9.7%

QUARTER ON


642

3040

1874 1942

2465

1243

2185

2414

2190

0

500

1000

1500

2000

2500

3000

3500


2673

226

1150

616

1394

218 236

12531375

0

500

1000

1500

2000

2500

3000


Civil construction levels are building after a quiet second half of 2015 with particular contributions from the Hurunui

Water Project (PID 6122012), the North Harbour 2 Water Main (PID 101145017) and the Reeves Road Flyover (PID

100433017) being added to the “to do” list for this sector.


CONCEPT & DESIGN STAGE PROJECTS BY CATEGORY - Q2 2016

CONCEPT & DESIGN STAGE PROJECTS BY REGION - Q2 2016

0

20

40

60

80

100

120

140

160

180

200

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

Upper North Island Lower North Island South Island

$Mn (LHS) Project Numbers (RHS)

0

50

100

150

200

250

0

200

400

600

800

1,000

1,200

1,400

1,600

$Mn (LHS) Project Numbers (RHS)


The Residential category continues to be the main driving force within the Building sector. However, good

contributions from Community and Retail & Hospitality projects helped to offset a declining trend in other categories,

particularly Industrial. Major project proposals featuring in Q2 2016 include the $90M parkland development called

Eden Christchurch Ki Uta Ti Kai Project (PID 98726017) and the $200M Retail and Office expansion at Sylvia Park

Shopping Centre (PID 99518017).

RESIDENTIAL PROJECTS ($Mn) - including Aged Care

COMMUNITY PROJECTS ($Mn) - including Recreation, Health and Legal

+24.0%

YEAR ON YEAR

CHANGE Q2 2016 vs. Q2 2015

+144.4%

QUARTER ON


-8.6%

YEAR ON YEAR

CHANGE Q2 2016 vs. Q2 2015

-23.2%

QUARTER ON


211

1204

656

355

940

852

679

477

1166

0

200

400

600

800

1000

1200

1400


113

212

126 134

442

115

258

526

404

0

100

200

300

400

500

600



OFFICE & COMMERCIAL PROJECTS ($Mn)

EDUCATION PROJECTS ($Mn)

-62.6%

YEAR ON YEAR

CHANGE Q2 2016 vs. Q2 2015

-62.7%

QUARTER ON


+327.3%

YEAR ON YEAR

CHANGE Q2 2016 vs. Q2 2015

-72.7%

QUARTER ON


55

725

262

123

22 18

364344

94

0

100

200

300

400

500

600

700

800


62 68

93

1130

423

117

272

424

158

0

200

400

600

800

1000

1200



RETAIL & HOSPITALITY PROJECTS ($Mn)

INDUSTRIAL PROJECTS ($Mn)

-32.9%

YEAR ON YEAR

CHANGE Q2 2016 vs. Q2 2015

-38.6%

QUARTER ON


-89.6%

YEAR ON YEAR

CHANGE Q2 2016 vs. Q2 2015

-82.3%

QUARTER ON


54

334

615

150

106

5

282

62

11

0

100

200

300

400

500

600

700


147

497

122

50

532

136

330

581

357

0

100

200

300

400

500

600

700


12


13


Although new proposals for Building projects have recently been at reasonable levels, planning on Civil projects has

been relatively quiet but picked up in Q2 2016 with such projects as the North Harbour 2 Water Main (PID

101145017) and the Reeves Road Flyover (PID 100433017).

TOTAL PROJECTS IN UPPER NORTH ISLAND ($Mn)

UPPER NORTH ISLAND

+16.4%

YEAR ON YEAR

CHANGE Q2 2016 vs. Q2 2015

-6.4%

QUARTER ON


2893

1853

720575

1571

1141

1418

19521828

0

500

1000

1500

2000

2500

3000

3500


14


BUILDING PROJECTS IN UPPER NORTH ISLAND ($Mn)

CIVIL PROJECTS IN UPPER NORTH ISLAND ($Mn)

UPPER NORTH ISLAND

-25.9%

YEAR ON YEAR

CHANGE Q2 2016 vs. Q2 2015

-31.0%

QUARTER ON


+1770.3

YEAR ON YEAR

CHANGE Q2 2016 vs. Q2 2015

+126.1%

QUARTER ON


335

1804

269

406

1534

962

1272

1646

1136

0

200

400

600

800

1000

1200

1400

1600

1800

2000


2558

49

451

16937

179 146306

692

0

500

1000

1500

2000

2500

3000


15


Although there was a healthy number of project proposals during Q2 2016, the average value of those proposals

was well down in comparison with the other Regions. Nevertheless, the pipeline of future projects is building

steadily.

TOTAL PROJECTS IN LOWER NORTH ISLAND ($Mn)

LOWER NORTH ISLAND

+49.6%

YEAR ON YEAR

CHANGE Q2 2016 vs. Q2 2015

+13.3%

QUARTER ON


40

298

338

237262

54

314

346

392

0

50

100

150

200

250

300

350

400

450


16


BUILDING PROJECTS IN LOWER NORTH ISLAND ($Mn)

CIVIL PROJECTS IN LOWER NORTH ISLAND ($Mn)

LOWER NORTH ISLAND

+2.6%

YEAR ON YEAR

CHANGE Q2 2016 vs. Q2 2015

-8.5%

QUARTER ON


+173.6%

YEAR ON YEAR

CHANGE Q2 2016 vs. Q2 2015

+48.1%

QUARTER ON


36

214

118106

190

52

294

213195

0

50

100

150

200

250

300

350


4

84

220

131

72

2

20

133

197

0

50

100

150

200

250


17


The levels of new project proposals have been fluctuating over recent times although they seem to be picking up

after a significant decline in Q3 2015 (also observed for the Lower North Island). Although comparing unfavourably

with Q2 2015 and Q1 2016 (which included the $500Mn Wanganeka Road Link (PID 92630017)) Civil proposals

were at a good level with the help of the Hurunui Water Project (PID 6122012).

TOTAL PROJECTS IN SOUTH ISLAND ($Mn)

SOUTH ISLAND

-33.6%

YEAR ON YEAR

CHANGE Q2 2016 vs. Q2 2015

-1.8%

QUARTER ON


382

1115

1966

1746

2026

266

689

1369 1345

0

500

1000

1500

2000

2500


18


BUILDING PROJECTS IN SOUTH ISLAND ($Mn)

CIVIL PROJECTS IN SOUTH ISLAND ($Mn)

SOUTH ISLAND

+15.9%

YEAR ON YEAR

CHANGE Q2 2016 vs. Q2 2015

+54.8%

QUARTER ON


-62.2%

YEAR ON YEAR

CHANGE Q2 2016 vs. Q2 2015

-40.3%

QUARTER ON


271

1022

14871430

741

229

619555

859

0

200

400

600

800

1000

1200

1400

1600


111 93

479

316

1285

3770

814

486

0

200

400

600

800

1000

1200

1400



JULY 2016


GROSS DOMESTIC PRODUCT ($Mn) Source: Statistics New Zealand Seasonally adjusted chain-volume series ex-pressed in 2009/10 prices

BUILDING CONSENTS ($Mn) Source: Statistics New Zealand

SUMMARY

Economic growth, buoyed in recent years by strong net immigration numbers, appeared to be decelerating since ear-

ly 2015, impacted by plummeting dairy prices and a ‟topping-out‟ of earthquake related building activity (evidenced

by the tailing off of Building Consents, especially Non-residential).

However there was a modest recovery in Q1 2016 although a new concern is emerging with low inflation. This adds

to the complications for the Reserve Bank in setting the Cash Rate with house prices threatening to race ahead and

the NZ dollar at a higher level than the Bank would prefer.

+2.8%

YEAR ON YEAR

CHANGE Q1 2016 vs. Q1 2015

+0.7%

QUARTER ON


+11.3%

YEAR ON YEAR

CHANGE Q1 2016 vs. Q1 2015

-12.1%

QUARTER ON


0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

49,000

50,000

51,000

52,000

53,000

54,000

55,000

56,000

57,000

58,000

GDP - Chain Volume @ 2009/10 prices YoY CHANGE

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

RESIDENTIAL NON-RESIDENTIAL TOTAL


INFLATION AND CASH RATE Source: Statistics New Zealand & Reserve Bank of New Zealand

NON-BUILDING GDP EXPENDITURE ($Mn) Source: Statistics New Zealand

+1.1%

YEAR ON YEAR

CHANGE Q1 2016 vs. Q1 2015

+12.0%

QUARTER ON


+0.4%

YEAR ON YEAR

CHANGE IN CPI Q2 2016 vs. Q2 2015

+0.2%

QUARTER ON QUARTER CHANGE

IN CPI

Q2 2016 vs. Q1 2016 0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

115511601165117011751180118511901195120012051210

CONSUMER PRICE INDEX LH Scale

ANNUALISED INFLATION % RH Scale

OVERNIGHT CASH RATE % RH Scale

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000


Information utilised in this report is current as of 1 July 2016.

The information for the economic indicators was drawn from the Government website of Statistics New

Zealand (www.stats.govt.nz). BCI New Zealand does not lay any claim to this data.

This information has been prepared without taking your specific needs or objectives into account. Because

of this you should consider its appropriateness with regard to your objectives or needs before acting on

this information. BCI New Zealand does not warrant the accuracy or completeness of the information in

this publication, and accepts no, and disclaims all, liability for any loss or damage whether occasioned by

reliance on such information or otherwise. The information is subject to change without notice and BCI

New Zealand is under no obligation to update the information or correct any inaccuracy which may

become apparent at a later date.


BCI Economics offers three types of services to clients active

in the construction sector; Ongoing, Specialised and On

Demand.

ON-GOING

As part of its service to project leads subscribers, BCI offers

periodic construction forecasts. These are an integral element

of BCI‟s member services and an important aid in helping

decision makers anticipate critical changes in market demand:

BCI FORECASTER is a monthly report of construction starts

(as measured in local currency value), The short term review

of market developments contrasts the most recent three

months against the three months prior; the short term forecast

compares the up-coming three months with the most recent

three months‟ period. The long term review contrasts the most

recent twelve months against the corresponding twelve

months‟ period in the prior year. The long term forecast

compares the twelve months‟ period ending three months out

with the corresponding period in the prior year. The Forecaster

serves as an effective, extremely competitive short term sales

and operations planning tool.

BCI CONSTRUCTION OUTLOOK is BCI‟s annual outlook for

the forthcoming fiscal year. The comprehensive report is

presented to the public at BCI‟s Annual Breakfast Briefings. It

provides a succinct fact-based picture of construction market

demand for the next four quarters, contrasted against the last

12 quarters.

BCI SENTIMENT SURVEYS are conducted annually and

focus on the business confidence of stakeholders in the

construction sector (developers, architects, builders and

subcontractors), shedding valuable light on the overall market

trajectory.

SPECIALISED

Current market developments guide BCI in its choice of topics

for its widely recognised market reports. Past reports have

included Green Building reports (2006, 2008, 2010 and 2014);

Construction in the Health Sector (2009); Building the

Education Revolution (2009), New Energy Report (2012) .

ON DEMAND

On demand research includes all commissioned research

conducted by BCI Economics at the request and pursuant to the

specifications of our clients.

TEMPLATED RESEARCH

This type of research implies that BCI Economics bundles

research projects across several clients, making commissioned

research particularly affordable for clients. This approach often

involves so-called omnibus surveys. As a source of reliable, quick

and cost-effective information on topics which are generally too

brief to be addressed in a separate survey, omnibus surveys by

BCI involve a range of methodologies including complex searches

in BCI‟s comprehensive project leads database, on-top research

to provide extra information on existing project reports (e.g. white

good brands chosen for serviced apartments completed in the last

12 months) and target group surveys. The topics typically address

one of the following:

Market Share Analysis

Decision Maker Analysis

CUSTOM RESEARCH

Custom research at BCI Economics knows few limits, provided the

construction market is involved. Over the past two years BCI

Economics has successfully completed comprehensive market

studies on a variety of building product sectors including, but not

limited to; roofing, insulation, lighting, home appliances, elevator/

escalator, air-conditioning system, sanitary ware, copper building

wire and light steel. The assignments went all the way from simple

market share analyses to a comprehensive market due diligence

analysis for a proposed acquisition of an Australian supplier by an

European group. Typical assignments handled by BCI Economics

include:

Brand Awareness and Market Share Analysis

Market Entry Analysis

Market Development Analysis

BCI New Zealand Pty Ltd

100 Neilson Street, Onehunga

Auckland 1061

T: +64 800 942 876

F: +64 9 622 0568

Email: [email protected]

Contact

Tracy Halpin

Sales Manager, BCI New Zealand


Don Smith

BCI Economics Team Leader, BCI Media Group


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NEW ZEALAND Q2 2016 · q2 2016 vs. q2 2015-8.5% quarter on quarter change q2 2016 vs. q1 2016...

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