Construction industry remains uncertain

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The quarterly survey of industry decision-makers, conducted in June, found the sector continued to expect a considerable influx of work, with 75% of respondents in Christchurch anticipating work levels will rise over the coming year.
Earthquake-related building approvals rose from NZ$14 million in June to NZ$32 million in July, and more than 20,000 buildings have already received emergency repairs, according to Statistics New Zealand.

However, many of those surveyed said when and how the reconstruction work will eventuate was still unclear.
Davis Langdon New Zealand regional director Chris Sutherland says uncertainty continued to persist in the industry.
”There is a lot of anticipation, but a clear picture about the timing and extent of the rebuilding work is still to emerge,” Mr Sutherland says.
“Several survey respondents acknowledged that careful planning and additional design considerations were required before construction could begin in earnest,” he says.

Almost 90% of Christchurch participants and 69% in Wellington expect a boost in business from the reconstruction, the survey found.
However, 76% of respondents expect prices will rise by more than 10% in the Christchurch market over the coming year, up 20% from the March survey.
The reconstruction is expected to exacerbate skill shortages, with 82% expecting to find it harder to source trade labour once rebuilding gets underway.

Shortages of electricians, plumbers, construction and project management services and skilled trades generally have increased by between 5% and 10%. Reasons cited include the lure of better prospects in countries such as Australia, and a decline in skills due to lack of training.
Competition remains high across the industry as businesses struggle to lock in future work, and premium salaries are being offered to secure in-demand talent, despite uncertainty over when rebuilding will commence, several respondents said.

In Auckland and Wellington, industry sentiment is improving, with respondents less worried about the earthquake rebuild negatively affecting new projects in their regions.
Only 4% of Auckland respondents thought the reconstruction would reduce new business prospects, compared to 28% in the last survey, while 44% expect more work on the horizon.
In Wellington, more than 60% of respondents expect industry workload levels to remain stable, compared to 40% in the last survey.

The civil and restoration, and restoration and refurbishing sectors remain the top growth areas in the industry over the next 12 months, the survey found.
This is attributed to the Christchurch rebuild and businesses choosing to revitalise their assets rather than sell into lacklustre housing and commercial property markets.