NZ construction industry too stretched for 'enormous' clean-up ahead

Sunday, 29 January 2023

A house on Shore Road in Auckland's Remuera was knocked off its foundations after Saturday night's downpour.

Business leaders are concerned that New Zealand’s stretched building sector hasn’t got the capacity to rebuild following extensive damage from the unprecedented deluge of water that hit Auckland and other areas over the weekend.

“The clean-up is enormous, whether it's for businesses or for residential, at a time when we’re already short of people in the construction and building sector,” said Employers and Manufacturers Association chief executive Brett O’Riley.

“Where are we going to find the people, the tradies, and the staff that can swing into gear and do the work around the remediation? That’s a concern.”

* Auckland flooding: The longer road ahead to get region back to 'normal'

* Building inspectors assess damage to flood-hit Auckland homes

Flooding wreaks havoc across Auckland.

O’Riley is chairperson of the Auckland Business Roundtable which was set up during the Covid-19 pandemic to work with the Government on a business recovery programme for Auckland.

In a video call on Sunday, the group outlined its concerns to Finance Minister Grant Robertson, Economic and Regional Development Minister Stuart Nash and Auckland Mayor Wayne Brown.

O’Riley said businesses were still assessing the damage and the group would be meeting for daily updates, but he noted some areas had been severely impacted by flooding.

“The disruption is really significant, and the remediation is going to take a long time,” he said.

“This is going to place a huge amount of pressure on a supply chain that's already struggling to keep up with the volume of demand for new builds, and now we're going to have a significant volume of demand for insurance and remediation purposes.”

A house surrounded by floodwaters in Swanson, West Auckland.

That rebuild was not just confined to Auckland, but also other areas of the North Island which had been affected, he said.

O’Riley said immigration rules may need to be relaxed to allow people into the country to help with the remediation, as happened with the rebuilding of Christchurch following earthquakes.

“We may need to look at what we can do to try and get people into the country to help with the clean-up,” he said. “We know that in the Christchurch case, that’s what we did.

“When you start to look at residential houses, damaged train lines that need to be repaired, plus the current volume of work that's going on in infrastructure projects, it may not be far away from a similar scale of damage, albeit in a different way.

“It’s a pretty significant natural disaster and we may well need extra labour to help with that at a time when the last thing the economy needs is a slowdown in production.”

O’Riley said another major concern was that a lot of businesses did not have insurance, as a result of cutting back costs during the pandemic.

“A lot of businesses are having to cut costs, and in some cases they've cut things like insurance and so where you would normally expect insurance to cover some of this we understand that some businesses are not covered,” he said.

“We're not certain how significant that is, but definitely that was a concern obviously for all of us including the mayor and ministers Nash and Robertson to think that there may be some businesses that have not got insurance.”

He urged any businesses that were impacted to get in touch with their industry association so the information could be gathered and assessed.

“If the early indications that there are a number of businesses that don't have insurance is more widespread than we think, there could be a major problem and that was certainly something that both central and local government were really concerned about.”

He noted that even though businesses themselves may not be directly impacted, their staff may be unable to work due to their homes and family being impacted.

While some financial support was available through Civil Defence Payments, it was unlikely to be enough, he said.

“That's a good start, but we may need more extensive assistance as we start to better understand the impacts.”