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Warning to construction firms: Not so fast...

Tuesday 6th of August 2013

University of Canterbury MBA director Tony Mortensen said: “With the projected growth in the construction industry in New Zealand over the following next five years it is critical that contractors in this industry consider their exposure to risk. They need to understand how they can ensure that they do not overextend the organisation’s cashflows and other critical resources. The demise of Mainzeal, New Zealand’s biggest building group, demonstrates that even the perceived biggest and brightest companies may, in fact, be facing financial distress.”         

                                                                
He acknowledged the two biggest drivers of construction growth were the recovery in Canterbury and the population growth in Auckland.


“There are some positive signs of growth in the coming periods. However, this in itself does not always guarantee success for everyone involved as even the busiest companies can sometimes find themselves in difficult trading conditions. It is important that those in the construction industry stick to the basics, even when faced with the prospect of significant growth.”


He said an increase in the volume of work did not always translate into guaranteed financial stability.

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FMA outlines its latest expectations for advisers
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18 hours ago Steve Wright
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20 hours ago Backstage
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