Page 23 - HW December 2020

3. What are the biggest challenges facing the building products and services industry in 2021?
7% 8%
10%
7%
n Supply chain & fulfilment
n Global economic factors
n Recruitment
n Labour costs
n Staff wellbeing
n Impacts of Covid-19 on businesses
in for the next 6-9 months and remain optimistic. Commercial construction has 2-3 years of sizable projects locked in and remain full steam ahead. We have seen an increase in tendering opportunities with Government funding Wellington projects.”
3. What are the biggest challenges facing
the building products and services industry in 2021? The overall response to this last question reveals far fewer differences between suppliers and retailers & merchants.
“Supply chain & fulfilment” is by far the biggest challenge facing the hardware channel during 2021, say our respondents, far outweighing the next highest nominated challenges (see graph 3 above).
Having said this, the challenges that involve a human element – “Recruitment”, “Labour costs”, “Staff wellbeing” and “Impacts of Covid-129 on consumers” – together form a block almost equal to issues associated with “Supply chain & fulfilment”.
Looks like 2021 will be a big year for recruiters and a demanding one for HR departments.
It is interesting to add here that the retailers & merchants also rated “Discounting” (11%) as just slightly behind “Labour costs” and “Recruitment” (13% each) as the second tier of key challenges for the next year.
Still, supply chain remains by far the biggest concern,
as suppliers commented: “If demand does not support the increased costs associated with supply, businesses will relinquish their commitment to the overheads associated with doing business.”
“Let’s be clear: the inflated property sector is not the barometer of our nation’s business health and the global shipping industry assessment of doing business into New Zealand and the region all points to RISK.”
“Merchants are already seeing shortages in most categories
(bathrooms, cladding, decking/landscaping, etc.). This also applies to domestic logs as there is still demand overseas driving shortages here as a result.”
“Freight from overseas is a big issue.”
Retailers & merchants are also fully aware of supply issues:
“We have started to see an increase in supply issues and starting to bulk stock crucial product lines.”
“1. Supply chain disruption due to Covid.
“2. Regulation in the build process was an issue pre-Covid and hasn’t got any better.
“3. Staff wellbeing: don’t underestimate the toll 2020 and Covid has had on people and the roll-over effects of that we will see in 2021.”
From the retailers & merchants: “Recruiting good staff with industry knowledge has been hard after we reduced the team size to be more efficient and nimbler after lockdown ... We are now recruiting as the volumes continue to increase.”
“Challenge in recruiting quality candidates, in specialised areas such as Kitchen. The increase in the minimum/living wage has a serious financial knock-on effect right through.”
“The gap between team and leadership continues to close. Comments like ‘not sure all the responsibility being a team leader is financially worth it’. Developing a career path helps but is not always enough. Envisage a major increase in wages to sales ratio.”
Looking beyond the balance sheet at individuals, rather than companies, as one supplier notes, in all this it has been a tough year for people.
“In this unique time, all businesses need to allow for lower productivity and put their people’s wellbeing first, above profits. This may be challenging now but will pay in the long run.”
I will be surveying the industry once again towards the middle of 2021 to see how and if these outlooks have changed.
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DECEMBER 2020/JANUARY 2021 | NZHJ 21
14%
31%
state of the nation