Concrete delivery problems create stress for builders
Concrete is becoming increasingly difficult to get, putting further pressure on the constrained construction sector.
Builders say logistical issues in getting concrete delivered are not delaying projects but forcing companies to be much better organised.
The problem appears to be a combination of booming demand, a shortage of drivers in some places, and Auckland traffic.
Concrete must be delivered within 90 minutes of being mixed, and suppliers sometimes have only a short window of opportunity to make deliveries between peak traffic times.
William Lindesay, of Auckland’s Lindesay Construction, confirmed the lead-times in getting concrete delivered were a growing issue, although prices remained relatively stable.
‘‘We used to be able to ring up and get it the next day. Now, it takes three weeks, if we’re lucky, sometimes more depending on where you are.’’
He also thought it was happening elsewhere in the country. ‘‘It’s absolutely across the board. Before, you could fly by the seat of your pants more ... If you’re a disorganised builder, you’re probably struggling.’’
Concrete is a key indicator of growth in the construction industry and Forsyth Barr analyst Matthew Henry said supply was getting ‘‘pretty stretched’’.
‘‘Some of the lead-times we’re hearing about, it does range but I heard about three weeks, and sometimes more depending on who the customer is.
‘‘People are putting in more capacity but that obviously takes
had time, you need to find the sites and as you can imagine, that’s challenging in Auckland.’’
Rob Gaimster, chief executive of the Cement and Concrete Association (CCANZ), said concrete deliveries in Auckland were taking more like two weeks to fulfil, and the industry was asking builders to consider taking delivery later in the day.
‘‘The issues are around, everyone wants concrete in the morning,’’ he said.
Deliveries in Auckland were ‘‘challenging with congestion and restrictive windows where we can supply and then everyone wants concrete at the same time’’.
A shortage of truck drivers was also an issue, although that applied ‘‘across the whole industry, not just the construction industry.’’
However, Gaimster said long lead-times were much less of a problem outside Auckland, and under-investment was not an issue either.
Auckland’s plants had double the capacity the city needed this year, and two new ready-mix plants were coming on stream.
‘‘The industry’s going great guns, this year we’re expecting to produce around 4 million cubic metres of concrete,’’ he said.
That was a record, eclipsing the previous high just before the global financial crisis.
Forsyth Barr says ready-made concrete supplies have plateaued over the past 12 to 18 months, indicating the delivery problems are a matter of logistics.
Like others, the brokerage is picking the construction boom to peak this year, as residential building slows and non-residential activity flattens, although they are still at ‘‘buoyant levels versus history’’.
As well as capacity constraints, the concrete industry was facing rising construction costs, credit rationing by banks and higher borrowing costs.
It forecast that Fletcher Building, a major supplier, would see a 4 per cent growth in ready-mix concrete this year.