Over 70 bosses of some of our biggest construction companies have come together to form a new group aimed at tackling the “unsustainable” state of our commercial building industry.
The city rail link, the new Dunedin hospital, and Transmission Gully have all seen costs blow out.
A reflection says, Naylor Love CEO Rick Herd, of an unhealthy industry.
“It's escalated to unsustainable levels, to be frank,” he said.
David Kelly is the chief executive of the Registered Master Builders Association.
He says a new survey found problems repeating themselves with 100% of companies facing increased material and labour costs.
And thousands of companies, many of them small, have failed to work together for the greater good.
“Over a third of respondents said they were having at least six weeks or more delay on-site, the impact of that is not just that it's slower but that it's even more expensive than it should be,” said Kelly.
The Government is spending billions on schools, housing, hospitals and other infrastructure.
But the price hikes, mean delays.
“New Zealand has a great challenge, and an opportunity, ahead of it in our social infrastructure, our hospitals, our schools, our police stations, unless we smooth out some of that and improve our procurement, we are going to struggle to deliver what new Zealand actually needs,” said Kelly.
“When it comes to schools and hospitals, we can't afford to delay them.”
Herd says Naylor Love has had several projects shelved in the last few months.
“We're building large rest homes and several of them are completed and can't be staffed, so are essentially mothballed.”
Herd says collective bargaining through a single voice is one solution to the lack of materials.
“If we've got bigger, stronger construction companies. If they see a situation where there is going to be a shortage, they can start talking to overseas providers and start to innovate.”
For the residential sector, a fall in house prices is likely to mean a drop in construction there.
Right now, there are simply not enough workers to go around.
“We've got a lot of work in Dunedin,” said Herd.
“What's going to happen when the $400 million hospital work starts getting off the ground and literally the people aren't there?”
Immigration Minister Michael Wood says help is on the way.
“We've got a special sector agreement in construction so they do have access to migrant labour.”
“We are training up tens of thousands of young kiwis to give them the skills and experiences to get into construction.”
Kelly says the group’s task first task will be meeting with the Minister for Building and Construction Megan Woods this week. They hope to provide a single voice for the industry.
“It's quite difficult for the government or local government to deal with an uncoordinated sector.”
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