Shortages slow down projects
A record number of people are currently in construction-related apprenticeships in New Zealand, yet we’re still facing a nationwide shortage into the 2020s.
11,000 apprenticeships are currently being undertaken but 65,000 new workers will be needed over the next five years to meet construction firms’ demands and replace workers who leave or retire.
This isn’t the only issue the New Zealand construction industry is currently facing. Residential building costs continue to rise – they have jumped another 6.7 per cent in the last year.
What’s causing this? Economist Gareth Kiernan told Radio New Zealand, "Sub-contractor costs have been rising substantially [owing to] demand for tradespeople so they have been able to put their prices up significantly, and that is feeding through into higher building costs."
But Building Industry Federation chief executive disagrees. "Business is booming on one hand but while there's plenty of work around, there's a large number of people competing for that. If you don't take it, the fellow down the road will. It’s the downside of the boom,” he said.
No matter how labour influences rising building costs, there are other shortages for firms to consider too. The cost of materials gets higher and higher, and as we’ve seen in 2017, concrete is currently at a premium. According to Stuff.co.nz, the problem appears to be a combination of demand, driver shortage in some places, and traffic (concrete must be delivered within 90 minutes of mixing).
The result of all of this is slower project completion. To alleviate this, construction firms and their development teams must streamline their logistics and be better organised.
Such a demand will likely see the star building companies shine, while those that take a more casual approach may fall by the wayside.