Building sector faces big hurdles
Stretched industry is splintered, inefficient and needs to develop trust despite ‘burnt fingers’, writes Marta Steeman.
The fragmentation of the New Zealand construction industry, and the shortage of skills across the board from builders to designers to engineers, are key challenges with no short-term solutions.
These were among the issues discussed at ‘‘The Great Construction Debate’’ organised by the Property Council and held in Auck- land recently.
Attended by 250 industry members, the debate aimed to air the challenges, particularly in Auckland where there is a huge pipeline of construction work in the next few years.
One of the participants in the panel debate, Chris Haines from quantity surveyors Rider Levett Bucknall, said an industry made up of many small operators was inefficient and costs were high.
The public perception was that projects were developed by tradesmen for big construction companies such as Fletchers Construction and Hawkins, and these firms were investing in apprenticeships. The reality was ‘‘almost completely the opposite’’.
Big companies such as Fletchers and Hawkins managed the projects but there could be 45 subcontracting trades, who had to be co-ordinated like a well-oiled machine.
The meeting heard that the skills shortage was being solved on building sites by hiring lots of subcontractors who might be hiring other subcontractors and crews of builders, individual builders and teams of overseas workers. But these were short-term solutions plugging a gap.
With the fragmentation of the industry ‘‘the training and the apprenticeships are coming from the bottom up rather than from the top down,’’ the meeting heard.
Haines said there needed to be a catalyst to get some of the big contractors – who were often overseasowned and well-funded – to invest more in the physical side of construction and apprenticeships and forge more relationships with sub-trades.
The industry acknowledged it was hard for subcontractors to employ a large staff because their workloads were so variable.
Haines said there was discussion about clients bundling commercial projects into packages that would give big contractors more security for forward work planning, and which might encourage the big tier-one and tier-two contractors to invest more in training.
The skills deficit was not just in the physical part of the building industry but also in design, architecture and engineering and other disciplines, the meeting heard.
The meeting agreed there needed to be sharing of knowledge, but knowledge was regarded as intellectual property, Haines said.
Phil Eaton, managing director of project management company Greenstone Group, said a key issue for all parties was that the construction market in Auckland was already at its peak capacity.
Resources were stretched and many businesses only had time to focus on delivering projects rather than also investing in training and the business.
For developers, construction costs were a major issue. Because of the way buildings were constructed, with most parts of a project bespoke, it was hard to get efficiencies. Off-site manufactured products were used in parts of the commercial building market but much more could be done.
‘‘Training and innovation are less likely to be carried out as the small businesses cannot afford it or do not have the confidence in forward work to do so,’’ Eaton said.
‘‘Trust in the construction sector is a big issue. Everyone has had their fingers burnt and are a bit more than wary.’’
The Property Council said it would be using the content from the debate to inform its advocacy strategy.
‘‘Training and innovation are less likely to be carried out as the small businesses cannot afford it or do not have the confidence in forward work to do so.’’ Phil Eaton of Greenstone Group