Canterbury Procurement Forum The forward pipeline – fifth edition – November 2013

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  • Slide 1
  • Canterbury Procurement Forum The forward pipeline fifth edition November 2013
  • Slide 2
  • Content National Pipeline initial results Auckland Pipeline making the two regional reports look similar Canterbury Pipeline next iteration of the data and commentary on how this data compares with the National Pipeline See previous versions of the Canterbury pipeline for a description of the method and major assumptions for the data presented here.
  • Slide 3
  • National Pipeline
  • Slide 4
  • Two pronged approach in analysis: Bottom up Pacifecon known projects based on leads detected from a national network of analysts (and corroborated with Auckland and Christchurch pipeline data sets) Top down BRANZ economic forecast based on modelling of historic building consents and economic data for residential construction and their approach to modelling gross fixed capital formation High level results: Forecasting an unprecedented level of building and construction activity Peaking in 2016 nationally 2016 in Canterbury Forecast rate of growth in construction also very high in comparison with historic rates havent seen rate of growth for as long in past 40 years. Auckland the largest and fastest growing region 150% increase in residential building over the forecast period
  • Slide 5
  • Forecasting unprecedented construction demand 23%
  • Slide 6
  • Rate of growth in construction sector historically maxed at 10% pa for 2 years forecasting 4 years at 10%+
  • Slide 7
  • Regional forecasts
  • Slide 8
  • Regional rates of change in all building and construction
  • Slide 9
  • Auckland Pipeline
  • Slide 10
  • Connections between the two procurement fora Auckland pipeline report Intention to make both reports more comparable, where useful and possible Canterbury Pipeline Updated this report for easy to make changes to align with the Auckland pipeline report Note key differences between the three pipelines. Auckland and national pipeline are most directly comparable with Stats NZ fixed capital formation this is about 2x higher than the Canterbury pipeline which is most comparable with the building work put in place series. Key difference is fixed capital formation accounts for non-building construction and construction related costs such as legal fees, planning and consent costs etc.
  • Slide 11
  • Canterbury Pipeline
  • Slide 12
  • Contributing organisation and sector distribution Vertical or HorizontalSectorOrganisation VerticalCentral Government Ministry of Justice CERA Hospitals Canterbury District Health Board Ministry of Health Education Ministry of Education University of Canterbury Residential Housing New Zealand PMOs Vertical and HorizontalTransport Lyttleton Port Company Christchurch International Airport Ltd Urban redevelopment CERA Christchurch City Council Horizontal Horizontal including roads, water, waste water, electricity SCIRT Selwyn District Council Waimakariri District Council Roading (including bridges)NZTA Christchurch City Council Selwyn District Council Waimakariri District Council
  • Slide 13
  • Construction Intentions
  • Slide 14
  • Pipeline of work by major type of project
  • Slide 15
  • Main differences with previous iteration
  • Slide 16
  • Comment on major sources of difference between this and the August report Education peak about 2 years later than previous version, and longer and lower (by $15m) per quarter (taken $195m out of peak between mid 2014 and end of 2015) CERA project values lower and a later peak (6 months) SCIRT data correction regarding start of financial year. This has reduced total value of what captured by about $200m CCC reduced number of projects (1) and SCIRT impact Peak shifted out by a year, and a little lower.
  • Slide 17
  • Organisations overall expenditures for next three financial years (Comparable with Table 4 of Auckland pipeline) OrganisationSpend ($ million)total 2013/142014/152015/16 PMOs estimated1568168316934944 SCIRT5595655691693 HNZC155172 499 Canterbury District Health Board91118178387 CERA49115181344 Christchurch City Council7694104274 Waimakariri District Council796040179 Christchurch International Airport Ltd555352160 University of Canterbury415255148 Lyttelton Port Company294969147 Ministry of Justice214162124 Selwyn District Council463523104 NZTA108523 Ministry of Education0011 Total Industry Spend2763303732139013
  • Slide 18
  • Predicted changes in value of projects (Table 2 of Auckland pipeline) Total Portfolio$ million difference% of total March to June$ 5,053-$65-1.3% June to August$6,241$10.0% August to December$5,324-$145-2.7% March to December$3,369-$327-8.4% This compares the estimated value of the total programme where a project appeared (with the same name) in the two iterations indicated by the date. Most of the changes appear to be driven by changes in scope of projects / structure of the programmes.
  • Slide 19
  • Projection versus actual your actual data construction
  • Slide 20
  • Confidence in construction projections (with no PMO residential)
  • Slide 21
  • Comparison between this pipeline and the national pipeline forecast for Canterbury Note different scales fixed capital formation so will be higher (by at least 2x) Also this is annual data so need to multiply this pipeline scales by x4.
  • Slide 22
  • Pacifecon / BRANZ forecast value of residential and non-residential
  • Slide 23
  • Canterbury forecast in quarters
  • Slide 24
  • Pacifecon / BRANZ forecast and known value of non-residential construction
  • Slide 25
  • Comparison of pipeline with building work put in place Significant step up in building work put in place for Q3 2013. Have yet to understand any cost increases on the measured level of activity. On average the pipeline is explaining about 80% of residential construction observed and about 1/3 rd of non-residential building being done. See previous pipelines for commentary on method for the following two slides.
  • Slide 26
  • Projection / Actual with Stats NZ data (doesnt include infrastructure)
  • Slide 27
  • Implications of this for total pipeline
  • Slide 28
  • Understanding the implications of S curve analysis Previously noted that S curve analysis would affect the shape of the pipeline. S curve would tend to generate a lower costs at beginning and end of projects and a higher peak in the middle period of a project Following graph has s curved every project in reality programmes of small projects eg SCIRT / Residential repairs by PMOs / council programmes of
  • Gantt for projects >$50 million
  • Slide 37
  • Gantt changes >$50 mil (read same way as first Gantt chart)
  • Slide 38
  • Gantt for projects >$50 million,