To gain a better understanding of the trades sector workforce, it is useful to understand more about the businesses that employ that workforce in terms of both business maturity and size as measured by number of employees, along with regional variations.

68% of businesses in the trades sector are classified here as small, employing one to five people. Since 2011, the absolute number of small businesses has been increasing, however the proportion has been decreasing to give room for more medium sized businesses (between 6 and 100 employees). Since 2011, the proportion of small businesses has decreased from 67% to 64%, while the proportion of medium businesses have increased from 24% to 25%. Large businesses have held an almost constant share of 1% of the market.

The proportion of mature businesses (a business that has been in operation for at least nine of the last ten years) has been steadily increasing in recent years, growing from 36% in 2011 to around 45% in 2018. In the same time period, the number of new business has increased from 17% to 20%.

The geographic spread of these businesses has shown that there are relatively fewer mature businesses and more young ones in more populous areas such as Auckland and Canterbury compared to more rural regions like the West Coast. Auckland and Canterbury are the only regions with significant numbers of very large employers (101 employees or more), but most employers in every region are small.

To gain a better understanding of the trades sector workforce, it is useful to understand more about the businesses that employ that workforce. Historic business trends in the trades sector can provide a foundation for those aiming to address workforce concerns in each sector, such as talent attraction, diversity, retention and productivity. Businesses in construction, forestry and manufacturing are tracked in this study by their size, maturity and geographic distribution.

The chart below demonstrates a break down of the number of businesses of different sizes. The size of a business is defined here by the number of employees. 65% of businesses in construction, forestry and manufacturing have 1 to 5 employees. Only 1% of the businesses in these sectors have over 100 employees. It can be observed that manufacturing has a higher proportion of larger businesses than the other two sectors. Meanwhile, forestry is dominated more by smaller businesses, between 1 and 20 employees.

The second chart here demonstrates how these numbers have changed over time. The overwhelming trend shows that there has been an increase in the absolute number of businesses. The decrease in 2009-2011 corresponds to the global financial crisis.

Out of the construction, manufacturing and forestry sectors, it can be observed that there have been slight changes in the proportions of businesses by size overtime. The proportion of smaller businesses has been decreasing to make room for more medium sized businesses. In 2011, 67% of businesses had between 1 and 5 employees, which as of 2018 had decreased to 65%. On the other hand, the proportion of businesses with 6 to 20 employees has grown slightly from 24% to 25% over the same period. Employers with 21 to 100 employees has also seen a slight increase from 8% to 9%. The proportion of large businesses with more than 100 employees has seen no change, although in absolute terms, the number of these large business has increased from 225 to 294.

The first chart below shows all trades sector businesses with employees (i.e. excluding sole traders and contractors) grouped by how long they have been in operation over the preceding ten-year period. This outlines business maturity among employers in the trades sector. Maturity is determined by how many of the last 10 years that business has been in operation.

It can be observed that most businesses will have been in operation for 9 years or more. This holds true for both construction and manufacturing, however, this is not the case for forestry. The forestry sector has almost equal amounts of businesses that were operating for 1 or 2 years as those that have 9 or more years in business.

The second chart outlines how business maturity has changed over time. The number of mature businesses – those that have been in operation for at least nine of the last ten years – has been steadily increasing from 38% in 2011 to about 47% in 2018. There has also been an increase in the proportion of new businesses from 17% to 20% over the same time period. This has meant that there has been a decrease in the proportion of businesses that have between three and eight years of operation.

When looking at the geographical distribution of mature businesses, it can be observed that more populated areas, such as Auckland, Canterbury and Waikato, tend to have the lowest proportion. Tasman, West Coast and Southland appear to have the highest proportion of well-established businesses with few young ones. Auckland and Canterbury have the highest proportion of businesses that have been operating between one and four of the past ten years.

The map below portrays the distribution of the businesses and employees in the trades sectors across New Zealand. Overall, more trades businesses and employees are concentrated in Auckland, followed by other urban centres such as Canterbury. Forestry, on the other hand, is distributed more evenly across New Zealand. This is not surprising as these businesses can only operate in rural areas with the space to accommodate the nature of forestry.

This section explores how many employees are hired by businesses sizes. In the previous section, businesses by the number of employees, it was found that most employers had between 1 and 5 employees. Here, it can be observed that medium-sized businesses hire most of the workforce. This is especially true for forestry. However, for manufacturing, most of the workforce works for businesses that have over 21 employees.

The second chart demonstrates how this has changed over time. While there was a small increase in the proportion of larger businesses, the number of employees has not reflected that. This suggests that employees in each range are spread across more businesses. The construction industry has shown an increase in the number of businesses with over 100 employees.