Construction industry performing well

Statistics New Zealand’s Annual Enterprise Survey (AES) for the 2014 financial year shows construction firms doing well

In 2014, operating profit before income tax for all businesses increased by $4.1bn (7%) to $62.6bn. Dairy cattle farming recorded the largest increase, up $1.9bn following a fall in 2013.

Construction services – a subset of the construction industry – recorded the fifth-largest increase, up $0.4bn. Approximately 80% of construction services businesses were profitable in 2014, similar to 2013 levels.

Measured by industry, construction recorded the highest return on total assets (ROA), increasing from 9.3% to 11.2%. For the residential construction sector, ROA increased by 0.6% to 12%, following a 3.7% increase the previous year.

For all industries, ROA improved from 3.2% in 2013 to 4% in 2014. ROA is a ratio of surplus income before tax to total assets that measures how effectively a company uses its assets to generate earnings.

The AES is the most comprehensive source of financial statistics in New Zealand, providing information on the financial performance and position of businesses across the country. The 2014 survey was made up of 437,958 business units.