What are the major issues affecting the New Zealand construction sector as we approach 2024? And how should the new government address these?
To New Zealand Certified Builders CEO Malcolm Fleming, tackling house building unaffordability, creating a strong pipeline of work, and the issue of sustainability are the three top of mind topics for the Kiwi construction industry as we move into a new year. Fleming told a 100-strong Construction Accord seminar this spring that the industry needs to progress at a quicker pace.
“Tackling building unaffordability is absolutely key for us,” he said. "Part of the main reason for lack of affordability is a lack of competition and there is also little to no appetite from designers, from builders, from the BCAs to adopt new products, new systems and new technologies that could lead to increased productivity and drive down costs.”
NZ Construction Industry Council Chair Fleming says, "New Zealand needs to create a bigger range of products to bring to market. And with that, trusted third-party accreditation to ensure that new products are fit for purpose for the New Zealand environment, which is high wind, high rain, and, uniquely, high UV as well.”
He recognises there are ‘some regulatory levers to pull’ around such introduction and use of innovative products and tools that could create efficiencies and lower costs. “However, this needs a driver. The industry needs to be pulled, as we have seen with the adoption of BIM information modelling and other technologies, we are slow to adopt unless we have to.”
Fleming suggests looking overseas for examples of where mandating certain levels of modular construction has been successful, such as in Singapore, and similar building mandates in the UK.
The question of consent
Greater integration between the building consent and resource consent processes, he suggests, would be another level for regulators to pull. One example of this, which he is in favour of, he states, is the proposal to create better national direction on matters of national significance such as climate change and natural hazards.
“That idea needs to be worked up to provide more commonality and consistency between BCAs and what they are telling people with projects.”
He says that ‘reducing building consent inspection processing time frames is a biggie’, as is enhancing the use of producer statements and greater use of remote inspection technologies.
On sustainability, Fleming says, the industry needs to demonstrate a real focus on this topic, ‘which is a strategic imperative for both the NZCIC and NZ Certified Builders’. He places great importance on site waste reduction initiatives and welcomes the plastics accreditation scheme and building products and manufacturing scheme, as well as the digital construction hub. “All these things, and others, would benefit
from a joined-up approach from across the industry,” he says.
“We all have a role to play here. We need to encourage use of recycled material, and recycling the building materials we have. We need to encourage industries to develop products and materials that will help meet that zero-carbon target by 2050. It is all possible if we all play our part.”
Fleming says he hopes for a closer alignment between government and industry about proposed future workloads and the timings of bringing those work programmes to market. “We need to avoid bringing these on in a big lump that stresses and stretches the industry, as that contributes to the big peaks and troughs that we see as a sector.”
He welcomes better workforce planning and says he recognises the work that has already been done by the Construction Accord in this area following the 2023 North Island floods and Cyclone Gabrielle. A more secure pipeline of materials is another issue front of mind for Fleming, who mentions the impact this is having on the wood processing industry, for example. “Lack of that certainty of supply is inhibiting investment, and CLT and LBL manufacturing, and they cannot currently satisfy market demand for that.
“We also need certainty of supply to encourage investment in innovative new product technologies, for example including long-term supply agreements for things like modular construction,” he says.
Raising the roofing issues
Roofing NZ CEO Graham Moor has concerns about an incoming government taking an axe to existing programmes, without consulting the industry. “I’m a little concerned we’ll see a slash and burn approach. I hope that they adopt the best of what’s already there and that they, please, speak to the industry before they decide to chuck
something out.”
Something Moor would like refreshed is the Licensed Building Practitioners scheme, citing inconsistencies in its rules and regulations. “It is not servicing the industry as well as it should. It’s an absolute nonsense that I need to be an LBP to put your new roof on, but I don’t need to be licensed to do your re-roofing.”
He poses questions about processes and procedures he feels are ready for review. “We talk about increasing productivity for the sector, but how about some more productivity from the regulator? We have dawdled along for far too long. There are some really knowledgeable people in this industry, that really want to get stuff done, but we seem to dither and take years and years to get on with things and get stuff done.”
Moor praised the approach Construction Accord is taking on increasing sustainability in the industry but feels more could be done to help consumers make better environmental choices. “It’s really powerful that the Accord is bringing us all together and we do all need to be joining together in seeking similar outcomes.
“On the consumer side, however, we need to help make sustainable choices simple. When you are buying an electrical appliance, for example, you can see the energy efficiency rating and compare that to other products and make an informed choice. But we don’t seem to be able to measure things in terms of carbon footprint in our industry. It’s something we haven’t educated the sector very well on yet.”
Moor suggests New Zealand needs to ‘sell the sizzle of being part of the construction sector better’ to attract greater numbers of people towards a career in the Kiwi construction industry.
Mastering our future
Registered Master Builders Head of Advocacy and Strategy, Sarah Walker, highlights three key areas the organisation wishes to see action on from the new government. These were part of its Building a Better New Zealand 2023 manifesto: Smoothing the ‘boom-bust’ cycle, improving productivity, and taking climate action.
Walker says system level change is needed to finally break the traditional boom-bust cycle. “As we all know, parts of the system are not working as well as they could be. We have an aspirational approach to fix things at a system level so we can make things better for New Zealanders.
“On the ‘boom-bust’ cycle, we want to take the apathy out of the sector and the Government of just accepting that we have been in boom-bust cycle of very high highs and very low lows for about 70 years. We just seem to accept it as it is what it is. “So David [Kelly] and I have been doing a lot of work around moving that apathy and getting an understanding that not only can we do something about this, but we must do something about changing the boom-bust cycle that we are
under.
“We are not going to remove the volatility completely, but we do want to smooth it as much as we can. We don’t want those rugged peaks you see in Queenstown, we want more rolling hills!”
Walker says Registered Master Builders are very keen to play a role in fixing the New Zealand housing crisis. She suggests improving access to finance for its residential members is an important part in this, as is land development and how this is accessed.
“We don’t have the technical skill sets that we need. We need to attract those from overseas and as a country, as a government, we have decided not to compete with other countries to get that. So we are putting a lot of effort into making sure we can access the future workforce that we need.”
Walker also feels work force retention should be as strong a focus as recruitment. “We have to look at the culture of our sector. There is a focus on attraction and that’s very important… but we have to start looking at retention as well. That’s where the real cost is in.
“So we’ll be looking at ways we can work with the sector to improve the culture so that not only are we an attractive sector, but we retain the people that we get, particularly the really good people. That’s really important for our commercial people, because those really experienced commercial guys who have been through technical, massive projects are worth their weight in gold.”
The consenting process continues to be a stumbling block a theme among industry leaders, Walker included. “The consenting review being undertaken by MBIE is great but it’s going to take a long time. Some of the pain points that we see are now being remedied from this.
"We need to look at better use of technology and we need to look at how we can modify and reduce the compliance consent burden.”
Walker also says procurement is an area in need of attention, along with the pressing issue of climate change.
Civil contractors’ state-of-play
There is real concern about the future among civil contractors in this country, according to Civil Contractors NZ CEO Alan Pollard. He says a recent survey showing only 34% of members feel confident about the outlook in the civil construction sector. And yet only a meagre 7% believe current NZ infrastructure can sustain ongoing climate change events.
“Only having a committed and funded programme of work will give members the confidence needed to invest in people and the technology to deliver these projects that are needed,” Pollard says.
He says New Zealand needs to move away from the ‘one size fits all’ approach for the construction industry, with a horizontal sector view needed alongside the usual vertical focus. Poor procurement processes also need to be tackled, says Pollard.
Pollard says he would like to see a more effective infrastructure funding and investment mechanism. “We have got a huge programme of work ahead and I really fear how this is going to be paid for, as we know the cupboard is bare. We cannot afford to take the same approach to infrastructure investment that we have in the past.”
He said 72% of Civil Contractors NZ members identified labour shortage as a major problem. Pollard recognises an approach to remedy this involves technology, education, and immigration. “The immigration pathway has to improve,” he says. “We do need to remove more of the barriers to entry to make that a more sustainable pathway.”
Mental health is a key issue in need of more work to address, says Pollard. “We have got to see better support for our industry on mental health. It is unfathomable to think that we are still losing, on average, one person a week from suicide. Over the next three years, I would like to see mental health actually taken seriously by the parties in power and some tangible support provided to try to turn around this
unacceptable problem.”
