New Zealand’s construction industry is riding a massive rebound in business confidence, but this may be undermined by skills shortages with 90% of construction firms having difficulty recruiting, finds Civil Contractors New Zealand
Findings from the 2021 Construction Industry Survey, a partnership between Teletrac Navman and Civil Contractors New Zealand (CCNZ), validate growing sector confidence, with 50 percent of those polled optimistic the New Zealand construction industry is on the upward trajectory and over half predicting turnover and staff growth in the next 12 months.
A significant difference in this year’s survey results is a rise in the requirement for skilled staff to unprecedented levels, with growing workloads and closed borders.
A new survey of CCNZ and other key industry body members has found nine out of ten construction firms are having difficulty recruiting in New Zealand. The 135 organisations that responded to the survey collectively reported 3,229 vacancies across a wide range of jobs and experience levels, varying from professional services to trade roles.
The survey found that while many firms usually recruit from overseas, most are currently not doing so because of concerns about New Zealand’s border exception processes and criteria.
CCNZ Chief Executive Peter Silcock says the findings showed that many in the industry felt that Immigration NZ’s border exception criteria were too narrow, and in some cases at odds with the Government’s intention to allocate MIQ places for the construction sector.
A report on the survey findings has been sent to Government, along with a request to meet key ministers to discuss the issues raised.
The main recommendations include:
- aligning Immigration NZ’s border exception criteria for “long-term critical workers” for the infrastructure sector with the MIQ group allocation criteria,
- lowering the salary threshold for workers whose skills are in short supply,
- adding construction sector professions and occupations to the list of approved classes of workers, alongside dairy farm managers and shearers etc,
- improving levels of support from Immigration NZ for the sector, including help with applications for MIQ places and border exceptions (e.g. nominated key sector contacts and application templates).
Silcock says access to a skilled workforce and pipeline of talent was essential if the current and proposed infrastructure investment across New Zealand is to be delivered. The survey findings could play an important role in highlighting the need for change to our current immigration settings.
What the future holds
Industry is confident about future work but still needs clarity from local and central government on when work will come to market. As New Zealand normalises post-pandemic, issues such as fluctuating costs, sustainability and environmental impact have returned to the spotlight, and will influence client procurement decisions that sets how the country’s infrastructure is built in years to come.
“It’s encouraging to see the groundswell of optimism in New Zealand’s civil construction industry, which indicates the country is back to business-as-usual post-COVID,” says Silcock.
“The future of construction in New Zealand certainly lies in keeping the people within this sector confident, so civil contractors can continue to invest in the right people, capability, and equipment for the work ahead.”
The good news is infrastructure activity is forecast to increase to NZ$10.1b in 2025. Already, transport, water and subdivision projects dominated new infrastructure activity in 2020, contributing 85 percent of projects and 88 percent of total value.
Three Waters assets are projected to require between $120b and $180b investment over the next three decades, which supports the survey results where participants identified Three Waters projects and maintenance efforts with the most significant number of opportunities for increasing capability. This is followed closely by roading (24 percent), public transport (17 percent) and public infrastructure (16 percent).
As New Zealand eases out of Covid-19 restrictions, the construction industry has a renewed focus on both the issues and challenges. This may impact the potential growth they expect from the pipeline of work they have before them and on benefits they may achieve using emerging technologies.
“The industry has said, loudly and clearly, that they want local and central government to provide a clearer pipeline for upcoming work,” says Jim French, Construction Industry Specialist, Teletrac Navman.
“However, the lack of clarity impacts their planning for manpower and resources in these uncertain times. Covid-19 still affects the industry, as border closures dampen hiring outside talent and delay the supply of building and construction materials. Renewed buoyancy on the other hand is putting the spotlight back into sustainability and environmental issues.”