Has Auckland building peaked?
Data on cranes shows construction in city may have hit capacity
The number of cranes operating in New Zealand has declined for the first time in years, largely because of a sharp drop in Christchurch. According to the Rider Levett Bucknall (RLB) Crane Index, out last week, the number of cranes in Auckland rose by just one as opposed to an average of about 10 a quarter since 2014. RLB director Chris Haines said the report — the eighth edition — raised the questions of whether Auckland had reached its peak construction capacity, and whether the focus was shifting from the rebuilding of Christchurch.
Overall, there were 123 “long-term cranes”, mostly tower or large crawler cranes, operating in New Zealand in the past quarter, down from 132.
“The real reason for the drop is Christchurch and the steam coming off the market there — it’s definitely slowing,” Haines said.
The number of cranes working on residential projects, on the other hand, went up by seven and now represented 45 per cent of the total nationwide.
This was particularly so in Auckland, where cranes working on residential properties rose by about 70 per cent.
Haines said this was largely due to the recent apartment boom in the city and its need for big cranes.
There was a decline in the number of cranes on commercial sites, which dropped from 34 to 27. Health, hotel and civil projects also employed fewer cranes.
“The other interesting one is Christchurch . . . which used to have more cranes than Auckland whereas where we’re at now it’s very noticeable how the work-rate’s dropped off and the crane numbers reflect that.”
Auckland’s 73 cranes now outnumber Christchurch’s by more than four to one.
“I think a lot of the issue is that people have been taking their insur- ance payouts and investing in Auckland, including a lot of institutional investors or funders who people had hoped would reinvest in Christchurch.”
The numbers coincide with the completion of important community projects in and around the city including the Christchurch Justice and Emergency Services Precinct, Crowne Plaza, the Forte Health expansion and the Hereford St carpark.
However, there were a number of projects planned for the rebuilding yet to happen, and the declining
number of cranes might indicate the rebuild had lost momentum after peaking in 2014.
“At the moment we’re getting so many CVs from . . . people who have done Christchurch repair work,” said Haines, who is based in Auckland.
“The question is what it means in the long term. Are the numbers in Christchurch going to keep going down because investment is falling and the focus has gone elsewhere to things like light rail, airports, wastewater infrastructure or Kaikoura and Wellington after their earthquakes?”
A number of Christchurch construction firms spoken to by the Herald said they had not noticed such a trend with plenty of work still being done. They said the number of cranes was not necessarily the most accurate measure of construction progress.
Chris Hunter, managing director of construction firm NZStrong, said it was not surprising that Christchurch was losing its cranes but he attributed this to the focus shifting to out-of-city jobs.
“[It’s not Christchurch being forgotten about] there’s bigger dynamics going on,” Hunter said.
The construction industry was heading into another demanding year in 2018 with risks associated with regulation and supply chain costs more likely than not to continue.
“You’re also going to have an increase in costs due to the new Government’s policies, particularly around minimum wage,” he said.
“The projects that are struggling to get funded, which are typically private developments, the crane report indicates that the residential side is probably going to peak in Auckland and then drop away, because you’ve had a massive volume of high-rises built by large developers in that space and I don’t see that continuing.
“But all other buildings, I can see the level of cranes staying the same if not increasing.”