| CONTENTS | FIDIC HOME |

FIDIC Annual Country Reports (1998)

New Zealand

ACENZ

1. Economic & Political Issues Relevant for the Association

The biggest impact on the economy in 1997 was the lack of direction from the first ever Coalition Government elected to Parliament in late 1996. The reform process within Government has slowed in recent years and require new impetus, particularly with privatisation or corporatisation of public sector assets. Further reforms were announced in the electricity and roading industries, but the Government appears restricted in its options outside of privatisation. More debate is sought on partnering, PFI and similar initiatives.

Inflation is still down at 2.6 percent but unemployment has risen to 6.7 percent. The $NZ dollar has fallen 20 percent against other currencies and the Asian crisis is expected to lower growth by 0.5 percent in 1998.

2. Market Situation

a. General

1997 was a reasonably positive year for members, with most reporting heavy or steady activity. Growth was 5.5 percent, lower than 1996 (7.7 percent growth). Demand for skilled staff was still b, despite the fact that some sectors shed staff (E&M staff primarily as a result of lower activity in the industrial sector).

b. Member Market Share

i. General Comments

Although ACENZ estimates that members hold a high percentage of the private sector market, this does not include data from multinational companies that import their own engineering design services or have their services performed offshore.

Local Government reform continues to develop with more local authorities contracting out their professional services. ACENZ members’ share of this market continues to increase.

ii. 90 percent of the private sector market is held by members.

iii. 60 percent of the public sector market is held by members.

c. State & Character of Market

i. New Market Opportunities

Local Government reform continues to offer the greatest opportunities for members.

ii. Main issues regarding Client Selection of Consultants

Public sector clients are still dominated by price despite a system of non-price attributes. Differentiation between providers of professional services remains difficult as this entails judgment. Education of tender evaluation teams is having only limited success. ACENZ is joining forces with the contracting industry to try and combat these problems.

iii. Main issues regarding Contracts

The main problems are with private sector clients who produce their own lawyer-generated contracts which are too onerous for consultants and require modifications. ACENZ has initiated a client/consultant working party to develop an industry standard contract.

iv. Client requirements regarding Quality Assurance & Certification

Emphasis has moved away from certificated quality management systems to quality plans for specific projects. Although 70-80 percent of ACENZ members are now covered by ISO 9001, there is now far less demand for certification. Firms are concentrating more on quality output of services and continuous improvement in those services. ACENZ activities tend to be focused likewise.

v. Status of Environmental & Life Cycle Client Priorities

Requirements under the Resource Management Act have put considerable strain on industry due to excessive interpretation by authorities. A review of this Act in 1998 is likely to see some fundamental changes to the application of this legislation. Local Government clients are slowly gaining wider appreciation of life cycle costing which can influence the selection process for both the solutions offered and the selection criteria for consultants.

vi. Other (eg levels of investment - domestic or foreign)

The relatively unhealthy state of the current account (7.8% of GDP - mostly private debt) is threatening to discourage investment. To some extent, this is offset by a healthy balance of payments surplus. It is hoped that the drop in the dollar will stimulate exports, despite the rise in costs of imported products.

d. State of Overseas Market

Members interests overseas have expanded in recent years, but North and South East Asia is still the predominant market. Some rationalisation within member firms is expected in 1998 as the Asian financial restructuring begins to impact on business. Whilst staff numbers in overseas offices are being reduced, no firms are expected to withdraw from the market. Staff are being brought back to New Zealand, thereby putting additional pressure on the domestic market.

3. State of Association

a. Membership

b. Membership Data (if known), expressed in % of staff

c. Membership Turnover for 1997 ($US1 =$NZ1.70)

d. Association Planning & Operations

i. Does your Association have a Strategic Plan? Yes - copy attached

ii. Does your Association have a Business Plan, and for what period? Yes - annual. Priorities for 1998 are:

• standard conditions of engagement
• promote and encourage contracting out from local government
• promotion of QBS to public sector
• education on existing Competitive Pricing Procedures
• practice management seminars
• support development of Industry Training Organisation

Priorities for 1997 were:

• develop staff management manual
• support establishment of Industry Training Organisation
• investigate development of standard conditions of engagement
• contact local authorities regarding contracting out
• membership drive
• upgrade awards scheme
• President’s Roadshow

iii. What use is made of member surveys and benchmarking data?

ACENZ undertakes a number of annual surveys:

• Remuneration (covers entire industry)
• Market Analysis (size of market and sectors)
• Personnel Data (also includes non-engineers)
• Business Performance (some comparisons made with American and Australian data)

iv. What is done to promote or cater for changing staff structures (multi-discipline firms and firms from the public sector wishing to compete in the marketplace)?

ACENZ Rules allow for multi-discipline firms and non-engineering consulting practices such as geotechnical firms, architectural firms, management firms etc. ACENZ services are aimed at all consulting firms irrespective of discipline.

Publicly-owned firms must be able to demonstrate that any work they obtain from their owner is contestable and that they do not benefit from subsidies.

v. Proposed changes in Statutes: Nil

vi. Planned changes in Membership Structures: Nil

vii. What are main arguments when promoting membership (or enclose pamphlet)

Pamphlet enclosed highlights a mix of tangible (eg group discounts, practice notes, training programmes etc) and non-tangible benefits such as lobbying, direct marketing, development of standards etc. Major benefits include benchmarking and professional networking.

viii. Training & Education (professional development) Activities for members

Through its staff management manual, ACENZ is attempting to establish benchmarks or templates for the ongoing training and development of staff and managers, through a mix of on-site training programmes and off-site. These in turn link into Continuing Professional Development requirements of the various professional organisations that members belong to (eg Institution of Professional Engineers, Institute of Surveyors, Institute of Architects etc). Through a new multi-professional Industry Training Organisation, there are opportunities to develop professional qualifications in management and other non-technical areas, as well as technical areas.

ix. Research & Development Activities

Nil, other than market research. Some members make use of the Government’s Foundation for Research & Technology funds to undertake research as well as the Public Good Science Fund. ACENZ is one of eight organisations investigating and developing an industry strategy on the needs of R&D in the construction sector.

e. Secretariat

f. Secretariat Training & Education

i. What resources are there for professional development of secretariat staff?

A budget is available for attendance at relevant seminars/courses developed from the annual performance review. The Society of Association Executives is a useful source of CPD for CEOs.

ii. What activities are considered most rewarding for Professional Development?

Interactive work shops or seminars are considered the most rewarding.

4. Other

It's Mission is to influence positively the business environment in which members operate, to raise the profile of the industry and the Association and to assist members to improve their business potential, upgrade the quality of their services and achieve their financial goals.

1. Membership - develop and expand the membership of ACENZ into a dynamic organisation equipped to respond to the needs of its members and the community;

2. Market Profile - enhance and improve the market profile of ACENZ and its' members;

3. Business Advice - provide an environment where the business skills of members are enhanced so as to optimise the quality of service to clients;

4. Performance - search out and make available information and products vital to members' improved performance;

5. Group Representation - provide a united voice for the industry on all issues affecting the business environment both nationally and internationally.

OBJECTIVES

Membership

1. identify and encourage all engineering and related consulting firms to become part of the ACENZ organisation;

2. actively pursue membership opportunities amongst other professional organisations that will add to the collective strength of ACENZ;

3. actively promote the value of membership to existing and potential members;

4. develop and encourage expanded participation and support in regional activities;

5. promote and reinforce standards of integrity, ethics and professional practice befitting the calibre of the consulting industry and those professionals engaged in it;

Market Profile

1. identify and organise promotional activities appropriate to members' needs;

2. encourage professional pride and recognise excellence in all areas of members' activities;

3. develop and promote strong professional and business ethics within the industry;

4. promote and enhance the ACENZ Capabank; *

5. encourage and support those representatives wishing to pursue leadership positions in the community and recognise them for achieving this;

6. maintain and enhance contact with individuals and organisations of interest to, and able to influence, the market in which members operate;

7. develop and promote programmes that stimulate public awareness of members' contributions to the "quality of life" and their concern for the public's health, safety and well being;

8. develop programmes to encourage people into the consulting engineering industry;

Business Advice

1. access, promote and provide relevant business practice educational programmes (CPD);

2. develop appropriate staff training programme structures;

3. prepare appropriate guidelines on business management issues;

4. undertake market research to monitor the state of the industry and members' business;

5. organise annual conferences and similar forums, relevant to the business needs of members and aimed at maximising networking;

6. maintain an appropriate reference centre, available to all members;

Business Performance

1. identify and arrange for the delivery of business products beneficial to members;

2. support policies that manage risk and minimise legal costs and financial losses;

3. assist members to educate clients on the roles and relationships among project team members that enhance quality and manage risk effectively;

4. maintain a flexible & proactive organisational structure capable of responding to the evolving diversification of members' business needs;

5. support policies that promote fair and open selection procedures in all markets;

6. identify and assist members in developing new market opportunities;

Group Representation

1. promote legislation, regulations and policies that secure and support members' business interests, and seek to negate those that do not;

2. strengthen the partnership and communications with FIDIC and FIDIC members;

3. establish and enhance a liaison programme with client groups;

4. persuade Government and others to encourage and facilitate the export of consulting services, including those of ACENZ members;

5. provide a common negotiating front in discussions with clients on Conditions of Engagement;

© FIDIC 1998 (published July 1998). For information, contact the International Federation of Consulting Engineers, BP 86, CH-1000 Lausanne 12 (tel. +41 21 654 44 11; fax: +41 21 653 54 32; fidic@pobox.com)

| CONTENTS | FIDIC HOME |