A bird’s-eye view of the country’s essential concrete industry. Rob Gaimster, Cement & Concrete Association of New Zealand (CCANZ), and New Zealand Ready Mixed Concrete Association (NZRMCA).
CONSTRUCTION INDUSTRY metrics indicate that over the past 12 months the Auckland region continues to be a ‘rock star’ performer, with a definite influence spreading south. Although other regions experienced a drop in activity, most notably in ready mixed concrete production, overall the concrete industry continues to prosper – an environment most likely to continue into 2017.
The 2016 year – construction metrics
When reflecting on the recent performance of the concrete industry, the go-to metric is ready mixed concrete production. There was a national increase of three percent in the annual total of ready mixed concrete production to June 2016; down somewhat on the previous two years, but still ‘growth’ and close to historic highs.
Data from BRANZ showed concrete slab-on-ground as the preferred foundation (ground floor) material for residential construction across the country – averaging 85 percent nationally. In the dominant markets of Auckland and Christchurch, these figures were 80 percent and 82 percent respectively.
A range of interesting concrete-based projects were prominent during 2016, notable for their complexity, scale, sustainability and aesthetics. For instance, the ‘strong’ floor and wall at the University of Canterbury Structural Engineering Laboratory showcased state-of-the-art concrete mix design and associated construction methodology.
The concrete components of roading projects across our country have been significant, with the Waterview Tunnel cross passages and super T beams of particular note. More unique in their concrete features were the refurbishment and extension of 133 Molesworth Street (the William Clayton Building) in Wellington, which took home the 2016 Supreme Concrete Sustainability Award, and the Harewood Underpass/Russley Road Upgrade in Christchurch.
Last year saw the ‘bedding-in’ of a new cement supply model. Golden Bay Cement moved to a different distribution model, which involved a South Island supply chain that uses 500 ISO tanks; a new ship capable of over twice the current ship capacity; and a 6000 tonne storage silo and ship loading upgrade currently under construction south of Whangarei.
Holcim New Zealand completed its $100 million investment in cement storage and distribution facilities with the opening of its Auckland terminal in July, following the January opening in Timaru. The 30,000 tonne storage structures are the first of their kind in this country, the creation of which saw the cessation of production from the company’s Westport plant.
The seismic events around the centre of the country late last year have raised questions about the performance of multi-storey buildings. Engineers have stated that Wellington’s mid-height buildings were worst affected, specifically those between eight and 15 storeys, as the quake generated intense accelerations in buildings in this height range, especially those on softer soils.
The performance of reinforced concrete structures was ‘as designed’, with lessons learnt adding to the knowledge gathered post Canterbury earthquakes, which will be reflected in design philosophies and updated Standards, such as a potential revision of NZS 3101 Concrete Structures Standard.
Both CCANZ and the NZRMCA have had busy years with a number of milestones achieved. For instance, CCANZ has managed a programme of research into reinforced concrete that arose from Canterbury Earthquakes Royal Commission recommendations. The research is coordinated through the University of Canterbury Quake Centre and when completed will feed into Standards revisions.
Quality remains a tenet of the concrete industry. This is evident in the NZRMCA Plant Audit Scheme which operates to provide an audit of the quality systems in place at ready mixed concrete plants. During 2016 the Scheme completed its online transition and also underwent amendments.
Opportunities and threats 2017
Over recent years the National Construction Pipeline Report has become a key document in forecasting construction industry activity. If the latest edition proves as accurate as previous versions then: National construction value is forecast to grow to a peak of $37 billion in 2017; and Auckland will account for a third of building and construction, by value from 2015 to 2021.
These forecasts, coupled with others from the banking sector and Treasury, suggest that the medium term outlook for residential and commercial construction remains positive.
Concrete industry investment
A sign that momentum in the economy is strong is the concrete industry’s recent level of capital investment. In addition to the changes that have taken place in cement supply, trade media is reporting that expected growth, and in turn potential capacity constraints, is a key area of focus.
The Hunua quarry in Auckland has received a $30-million redevelopment, and a new $22 million masonry plant at the quarry is due to be commissioned in June 2017. A number of ready mixed concrete plants are also scheduled to begin construction in West and South Auckland. Add to this the opening in November 2016 of a large precast factory in Pokeno and it is clear that expected levels of activity, particularly in and around Auckland, are considerable.
There is a concern however that a skills shortage, influenced in part by a decline in net migration, could threaten the industry’s ability to maximise opportunities. One strategy to address this is to have more people enrol in qualifications. As such the Building and Construction Industry Training Organisation (BCITO), in collaboration with industry, has developed Workforce Development Plans to help create a workforce that has the capability and capacity to meet current and future needs.
Another skills related concern, one that impacts on the haulage industry and therefore the ready mixed concrete sector, is the lack of Class 3 and more so Class 4 drivers. This has been an issue for a number of years, particularly in Christchurch, and is now become a limitation as Auckland expands.
In summary, 2017 looks to offer growth opportunities for the concrete and wider construction industry in a similar manner to the past two to three years. It appears however, that activity will focus predominantly on the Auckland, Waikato and Bay of Plenty regions.
While this brings forecasts of prosperity, it also gives rise to concerns about constraints caused by a potential lack of skilled workers.
This will have to be managed carefully, requiring collective responsibility to develop policies and practices that balance the needs of today with those of tomorrow.