Construction workers hitting the streets as job cuts arrive

Wednesday, 20 May 2020

Builders have returned to sites, but the new norm is a lack of work for some.

Newly redundant Fletcher Building staff are entering a tougher market, with workers increasingly knocking on the doors of existing players and recruiters.

On Wednesday the country's largest firm, Fletcher Building, announced it was shedding 1000 New Zealand workers and a further 500 workers in Australia.

Fletcher Building estimates house consents are about to dive, and the pipeline for commercial work will lose about 15 per cent of its value.

Fletchers, which has a strong residential and commercial presence, said it expected residential consents in New Zealand to fall 30 per cent by June next year.

Experts expect projects already underway to be completed, but there are fears other building companies will follow Fletcher's lead.

* Coronavirus: Fletcher Building staff pay uncertain during month-long lockdown

* Coronavirus: Builders, tradies worry about keeping contracts after lockdown lifts

CMP Construction which has several apartment projects underway in Auckland, has seen a sudden rise in applications for work, particularly from expatriates.

Construction manager Tony Howard said tradespeople were ''queuing up at the door,'' and about 20 CVs had come across his desk that day.

It was quite a contrast from the recent labour shortage, he said.

''It's a sad thing to say, but in the construction industry we do better in a recession because people are hungry, they're keen, to come to work… When there's too much work around, some people become very complacent.

More redundancies won't necessarily end the skills shortage in construction, some recruiters say.

''We work with about 14 recruitment companies and I'd struggle to get three people a month, there was just no one about.

''Whereas now we've got quite a high calibre of people on the market looking for work. We're getting a lot of people coming back from Europe and all over the world, Hong Kong, Singapore, Malaysia. Kiwis coming back because they're worried about their future. The brain drain's returning.''

Construction and Technical Recruitment, which focuses on site managers, engineers and other specialists, said many projects at the design stage were now being deferred, and that was creating a gap for many workers finishing up on a job.

''It's happened quite quickly,'' principal Nick Gillingham said. ''We're definitely seeing more people become available.''

But he said there was still a skills shortage, with many skilled workers from overseas going home and not too many Kiwi engineers and designers coming back.

''I think we're definitely still going to be still looking out talent, I think clients will get more particular about exactly what they need. There is going to have to be a business case for what they need and the calibre of person might need to cross a few different areas of expertise.''

Katherine Swan, country manager for recruitment firm Randstad New Zealand, said she was seeing more construction workers seeking advice than applying for work at present, but they were bracing for more redundancies.

Kevin Eder says there is one bright spot for Kiwi tradespeople as redundancies pick up pace.

''What we have seen is a lot of people hearing things in the market, seeing people being made redundant and [worrying that] if I'm going to be the next person where that happens, I won't be ready.''

She also believed while the pool of workers would widen, the skills shortages in construction would continue.

''I think there will be a period where the market takes time to settle as companies and Government actually identify essential projects. They realign their businesses into the new normal.''

Kevin Eder, managing director of Tradestaff, a labour hire company which has more than 1000 construction workers, said his firm was hearing that forward work was ''not what it was,'' but the situation varied across the country.

Winter was likely to be hard for some firms but ''firstly there were a number of projects underway pre-lockdown and the reality is they need to be finished and it's what happens next.''

''We've heard of some significant projects that have been mothballed but then we've heard of other places where building consents are up.''

Construction had been going ''gang-busters'' for several years, and while Covid-19 was not anticipated, it was expected the sector would eventually slow down.

And there was a silver lining for those still prepared to build. Interest rates were still very attractive and the skill set of available workers had increased, Eder said.

''If you wind back the clock two or three months, you just couldn't employ a qualified tradesperson, they just weren't available.

''So what was happening was a lot of construction sites were using a lot of immigrant labour, labourers instead of carpenters, those kinds of things.

''What will happen now is that a lot of Kiwi tradespeople will be looking for work, and I guess the other side of that is, as long as the border stays closed, it's probably quite a good thing for the Kiwi tradesperson.''