Construction sector calls for its own coronavirus alert levels to keep sector afloat

Tuesday, 31 March 2020

The construction sector was already in a precarious situation prior to the coronavirus outbreak, Infrastructure New Zealand chief executive Paul Blair says. (File photo)

Nearly a third of construction jobs are at risk over the next six months due to the coronavirus lockdown, Infrastructure New Zealand chief executive Paul Blair says.

Unless immediate action is taken to protect workers and restart construction projects, the sector will be in critical condition, Blair said.

He called for the Covid-19 alert level system to be modified to include sector specific levels that could change independent of the national level which currently stands at level 4.

A lower level would allow construction projects to continue, Blair said.

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The industry body had been speaking with its 140-plus members to establish what the impact of the lockdown would be on individual businesses and the wider sector, he said.

Marc Hunter, managing director of Latitude Homes says half finished building sites are now vulnerable to theft, weather exposure and product warranty expiry.

'Contracting and construction companies could let go of up to 30 per cent of their staff within three months under the current conditions. In six months, those providing advisory and other support services will be in a similar critical position,' he said.

The sector was already in a precarious situation prior to the coronavirus outbreak and this was being addressed through the industry-government partnership, the Construction Sector Accord, Blair said.

One of they key drivers of the accord was that construction businesses were failing, often because of cashflow problems. The lockdown had increased the pressure on cashflow, he said.

The sector wanted to see protection measures that had been successfully employed in Singapore and South Korea to keep construction sites open.

Infrastructure NZ had benchmarked protection measures from about 20 different countries to see what could work in New Zealand. All of them were taking different approaches, he said.

Health and safety measures could include geo-fencing (which detects when people come too close to one another) and temperature checks, Blair said.

Construction businesses are highly dependent on steady cashflow due to high fixed costs, says Infrastructure NZ chief executive Paul Blair. (File photo)

Government subsidies would help the sector but there was a 'clear mood' for a gradual reduction from level 4 to level 3 alerts and down.

'If we can agree measures around personal protection over the next three weeks, the most essential construction projects could move down to Level 3, allowing work to restart,' Blair said.

Many in the sector had said they could become insolvent in weeks rather than months, he said.

Latitude Homes managing director Marc Hunter said despite having six to nine months of work in the pipeline, it now had no cash coming in.

'There's going to be a lot of guys that will have a real hard time. It's quite scary,' he said.

Hunter said Latitude Homes was halfway through jobs that were now deteriorating.

'We've got the risk of theft, we've got the risk of damage and if this goes on after a certain period of time then we run the risk of going over product warrantee times. If there was weather damage on a property, we would have to pull up all the floors,' he said.

Given construction would be essential to the country's recovery, If risks could be mitigated and a staged return to work put in place the country could recover faster, Blair said.

There was a genuinely good health and safety culture in New Zealand and no-one should be working in unsafe conditions, he said.