Faced with a massive shortage of skilled construction workers, the New Zealand government is taking steps to ensure there are enough workers to meet the growing demand and predicted increase of building activity.
The Construction Skills Action Plan, developed in consultation with industry, the plan focuses on six key initiatives: expanding industry skills; leveraging government procurement; establishing additional jobs and skills hubs; growing construction careers and credentials; the Mana in Mahi—Strength in Work program; and further adjustments to immigration policy settings.
In terms of the government procurement aspect, the cheapest tender price will not mean preferred bidder. The government will actively preference giving contracts to bidders who can demonstrate their contractors and subcontractors will provide training opportunities.
“The construction sector is very important to the economic well-being of New Zealand and its people. It is one of our largest employers with nearly 10 per cent of the workforce engaged in construction-related occupations,” Minister for Building and Construction Jenny Salesa said.
“The construction sector is rapidly evolving—even five years ago few people would have appreciated the impacts of innovation and technology."
“The construction sector is rapidly evolving—even five years ago few people would have appreciated the impacts of innovation and technology, and so creating a plan that moves with, and reflects these changes, is vital.”
The recently released National Construction Pipeline report predicts that national dwelling consents in NZ are expected to reach a historic high of approximately 43,000 in 2023.
Generally, sustained growth is forecast for industry across all sectors, including multi-residential and infrastructure construction. Auckland, Waikato and Bay of Plenty are expected to see particularly strong growth in non-residential building.
David Kelly, Chief Executive of Master Builders New Zealand and Chair of the Construction Industry Council tells Jobsite that industry members are pleased with the overall package.
He says there is a desire on the part of the industry to work with the government on the initiatives and to see “proactive policies,” especially around bringing new workers into the sector.
It’s crucial for more people to see the construction industry in a positive light as a career option, Kelly says. That means incentivising training and encouraging businesses to take people on.
“A critical part of this is for businesses to step up,” Kelly says. “In the longer term, we need to be more creative and innovative with training.”
The Construction Industry Council currently has a project underway around the attractiveness of the industry, Kelly says. “One of the things I’m really clear about is the industry will continue to develop. The increasing use of technology helps make it attractive.”
"The increasing use of technology helps make it attractive.”
He said that in the Master Builders NZ awards program last year, several of the winning categories asked entrants about the use of technology as well as the use of off-site fabrication. Both are on the rise.
Building Information Modelling, in particular, is seeing a greater uptake. Kelly explains BIM is being used to “build the project twice.”
First, it is built virtually in the digital space, which enables all the parties in the design and construction team to see what is actually being built and address any errors or issues at an early stage. This addresses a major problem that has plagued the industry—the amount of re-work that commonly occurs once the building is underway.
“It provides the quality assurance up-front,” Kelly explains.
These approaches also engage a new type of construction worker, as they are not using traditional construction skills. Instead, they are leveraging tech skills.
Kelly notes that around 25 per cent of entrants have also used 3D modelling to produce a 3D model of the project. This helps everyone, including the client, see what the project will look like.
Another emerging trend is the use of drones, particularly for inspections. Moreover, drones allow to create a record of what has been built and prove a great alternative to sending someone with a camera up a ladder or a crane to capture images.
“We need clients to understand what’s possible,” Kelly says.
While the government strategy takes some “first steps” to make it more attractive for businesses to take people on and train them, Kelly says certainty of work is a major part of the equation.
The majority of firms in the NZ industry are small or medium-sized. For these companies, there are both financial and emotional considerations to taking someone on.
The government’s planned forward pipeline of work will help with giving these businesses some confidence, Kelly says. What’s more, he hopes the government will help resolve a level of assistance for companies to add new trainees and workers.
"He hopes the government will help resolve a level of assistance for companies to add new trainees and workers."
Another discussion underway in the NZ industry is around margins, Kelly says, as many of even the larger companies have been struggling with “really slim margins.”
“There is a healthy discussion going on now,” he says.
After all, slender margins make it difficult for companies to re-invest in their business and take new people on.
Another facet is addressing the level of business understanding in NZ firms.
“You don’t have to just be good at building—you have to be good at business,” Kelly explains. “Overall management capability is critical. We would like to see a stronger emphasis on business, construction management, and project management.”
Read the details of the Construction Skills Action Plan here.