Labour shortage could hamper construction boom

Monday, 9 September 2024

Levelling ground at Fletcher Living’s Gloucester Green residential site in central Christchurch.

Labour shortages could put a handbrake on a multibillion-dollar construction boom forecast for Canterbury, according to a new report.

The boom could bring the region $20 billion worth of work in the next three years, according to data released by the Workforce Development Council for Construction and Infrastructure (Waihanga Ara Rau).

But this potential would be halved if labour resources run short, it says.

Canterbury is already building the most new homes per capita in New Zealand, and has many major public and commercial construction projects planned or under way.

The construction sector includes road works as seen here on Barbadoes St in Christchurch.

Councils in the region consented 6762 homes in the past year - just over 10 homes per 1000 residents. This compares with 3.8 new homes per 1000 residents in Wellington, 7.9 in Auckland, and 8.3 in Otago.

New home consents for Greater Christchurch began rising again in April, after falling from a post-Covid 2022 peak of close to 9000 homes.

Mike Blackburn, author of the Canterbury Construction Report, said accounting for the lag between consenting and construction, home building should start rising again by the end of the year.

“We are at, or very very close to, the bottom of the current downturn. The years 2025 and 2026, based on underlying economic growth, will be really good years for the construction sector.”

Te Kaha One NZ Stadium is the biggest construction project in Christchurch, and is expected to be complete in April 2026.

Blackburn said the north-south drift is a key factor, with more people moving down from the North Island.

“With lower land and construction costs, Canterbury is seen as an attractive option to relocate to. This is likely to continue into the future.”

Major Christchurch non-residential construction projects under way include Te Kaha - to be named One New Zealand stadium - the Parakiore recreation centre, the Court Theatre, the Canterbury Museum upgrade, cycle routes, new office buildings, an Otago University research and laboratory building, and ongoing roading work.

Upcoming big projects include a new city council organics plant at Hornby, rebuilds of Hillmorton Hospital and the South Christchurch Library, new central city hotels, the Akaroa wastewater scheme, and the Pages Rd bridge.

Work on the Parakiore recreation centre site. (File photo)

Waihanga Ara Rau chief executive Philip Aldridge said the nation’s economic slowdown had led to a shortage of workforce skills.

“We expect the economy to pick up by 2025, with the (construction) sector likely to recover within 12 to 18 months,” he said.

“Canterbury is better positioned than many regions to bounce back, with more positive sentiment than in other parts of the country.

“However, the handbrake will be a shortage of skilled labour, preventing us from fully realising the region’s growth.”

Sydenham’s new Mitre 10 Mega is going up on Orbell St.

Waihanga Ara Rau was established by the Government in 2021 to track workforce numbers for both on-site and off-site skills in the construction sector. It calculates Canterbury now has 35,000 workers in the industry, and could do with another 23,000.

Among those most in demand now are carpenters, plasterers, concrete workers, project managers, and quantity surveyors. Less skilled roles such as labourers are not in short supply.

Cameron Bird, who co-owns house building company Fowler Homes in Christchurch, said several of his workers had left for Australia, and he “can’t really blame them”.

“They move overseas because they can make good money and have a pretty good lifestyle.”

Bird said not having enough skilled workers once demand picks up could lead to delays and slowdowns, but he was positive about the industry’s outlook and Canterbury’s potential.

“We’ve got a lot of growth, especially in Christchurch, where we have so much available land,” he said.

Greg Durkin, director of Te Pūkenga’s construction training division BCITO, said a quarter of New Zealand’s upcoming construction work is in Canterbury. The organisation had 1700 apprentices in the region, he said.

“There’s certainly a considerable amount of work coming up there.”

Durkin said factors affecting retention in construction trades and professions include an ageing workforce and the lure of better money in Australia.

While many “fantastic” immigrants were filling gaps, they could need extra training in areas such as seismic standards and language, he said.