Construction sector shows no sign of slowing

SINKING business confidence is at odds with robust economic fundamentals, perhaps no more so than in the booming construction sector, where growth is forecast in the industry said to be the main current contributor to GDP growth.

New Zealand’s total construction value output rose 5% last year to hit a record $39 billion worth of work and Auckland new housebuilding consents and completions are continuing to climb.

The sector employs 9% of the national workforce and this year, is forecast to finish more than $40 billion of work: new houses, infrastructure and commercial construction.

Cranes on our skyline are but one example: in this year’s third quarter, there were 131 large tower cranes up nationally, of which 95 were in Auckland, and although numbers are levelling off, they are still at record numbers, according to the RLB Crane Index.

Fletcher Building increased construction division gross revenue from $1.6 billion to $1.7 billion in the year to June 30, 2019, when it had a $1.4 billion backlog of work. And although it had intended to reject highrise work after losses in the B+I division, it said in August it had confirmed intention to ‘‘recommence focused bidding in the vertical construction market’’.

Culum Manson of New Zealand’s largest privatelyowned developer Mansons TCLM said: ‘‘We have north of $1 billion value of work under way and we’ve got a lot more coming.

‘‘Sentiment surveys don’t have anything to do with us. There’s a lot of talk about procurement processes and going for the lowest price but good operators don’t do that, anyway. We have a number of suppliers and contractors we’ve been working with for decades and we’re all sensible about how we go about our business. We don’t put too much risk on each other. If you’re just going for the bottom dollar, you’re going to get problems,’’ Mr Manson said.

Some current Mansons TCLM projects in Auckland include this year’s biggest real estate deal for $247 million, selling the underconstruction new office block at 155 Fanshawe St; 136 Fanshawe St, the former House of Haghi rugs site, where a new 22,938sq m office is rising with 212 car parks; at 46 Albert St, a $350 million 10level office building next to the new EVEN hotel, which will also include a Holiday Inn; 74 St Georges Bay Rd, new offices for Mansons, now next door. That Fearon Hay design is 2054sq m with 34 car parks; luxury apartments, Coates Ave, Orakei, almost completed; Ted Manson Foundation work, including new Liverpool St apartments, now finished in the CBD and new Glen Eden apartments, almost finished.

Mr Manson said it was his job to ensure a future pipeline of work and he envisaged no slowdown.

‘‘We have at least six years of construction locked in ahead of us.

‘‘We can see opportunities for the future and in our sector of the office market, people are still wanting to upgrade and it’s more affordable to do that.

‘‘It’s like getting a new car or a new phone.’’