The building environment is challenging, new building research has shown. (File photo) Photo: 123RF
- Building sector pessimism lightens - EBOSS survey
- Conditions still tight, tough and challenging but hopes sector has hit the bottom
- Small builders switched to renovations and commercial work as house building dips
- Industry faces possible skill shortage
The building industry is pinning hopes it has hit the bottom and will weather weak demand and a looming skills shortage to benefit from an eventual upturn.
Building research firm EBOSS's latest sentiment report shows a net 33 percent of firms reported slower demand compared to 55 percent a year ago, with just under a quarter reporting an improvement, nearly double the number in 2024.
EBOSS managing director Matthew Duder said the current environment was challenging, and for many had got worse over the year, but it was showing signs of improvement.
"Builders do seem to be predicting improvements in the future - it may be that we are at, or nearing, the very bottom of the cycle now."
He said the big difficulties had been maintaining profit margins and keeping the pipeline of work full.
However, building industry group, the Certified Builders Association, said firms, particularly small and medium sized ones, had adapted to survive.
"As new home build projects dried up, our members have shifted into doing more alterations and additions, the one area of the market where demand held firm.," said chief executive Malcolm Fleming.
"They also took on light commercial work, school projects, and flood and cyclone remediation work. It was driven by needs-must."
Duder said the next 12 months were expected to remain tough going for many.
Close to half of those surveyed expected conditions to get worse, forward workloads declined, and nearly two-thirds were saying they were struggling to fill their order books.
"Cost pressures, economic uncertainty, and competition for skilled staff remain top concerns for the sector," Duder said.
The survey also showed a looming skills shortage as the number of apprentices being trained at this stage would not cover the numbers lost during the downturn.
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