Contractor

Perspectives 2019: Building concrete confidence

By Rob Gaimster, CEO of Concrete New Zealand

The construction mood of 2018 was one of caution in response to the 2017 change of Government.

At the same time margins were tight, with some high-profile companies collapsing. There was also continued softening across Canterbury and a perceived levelling-off in the Auckland region.

Although a degree of uncertainty remains around Government intentions, construction metrics bounced back mid-year, with growth forecast for construction over the next five years.

As the concrete industry’s new consolidated association, Concrete NZ successfully completed its first year of operation, addressing strategic issues of concern and paving the way for its ongoing work on behalf of stakeholders.

The 2018 year in review

Construction metrics

Auckland continued to perform well throughout 2018, with third quarter ready mixed concrete production figures (a default indicator of industry health) breaking records for the metropolitan area and wider region. This level of activity is reflected in building consent and value of work indicators, with non-residential building activity on large projects driving growth.

Nationally, construction metrics continued an upwards trend, with the actual number of new dwellings consented at the year ended September 2018 up 5.4 percent, and the value of non-residential building work consented for the same period up 4.9 percent.

While the lower North Island mirrors the national trend, growth across the Waikato and Bay of Plenty has slowed, while the Christchurch metropolitan area and the Canterbury region continue to soften as post-earthquake rebuild work winds down.

Notable projects

2018 saw many exemplar concrete-based construction projects unveiled. The Manukau Bus Station forms the heart of the connected public transport network in south Auckland, while the Mangere Wastewater Treatment Plant BNR Upgrade was the largest single-site capital works delivery of wastewater plant for almost twenty years.

Against a backdrop of road construction and earthquake strengthening, it was pleasing to see Centreport Wellington’s concrete waste minimisation project grab headlines with its on-site processing of the buildings demolished following the Kaikoura earthquake.

In Christchurch, the new Crossing Retail Precinct and outstanding Tūranga library are examples of how, slowly but surely, the city is regenerating.

Association activity

2018 was a watershed for the concrete industry with the emergence of Concrete NZ as its consolidated association; designed to bring confidence, knowledge and leadership to members, industry and regulators, and in turn be highly respected and valued.

Concrete NZ will speak on behalf of its members with amalgamated authority, meaning stakeholders within government and amongst professional groups will be able to communicate with a single organisation representing the entire concrete industry.

Concrete NZ has emerged from a desire to “do better”. The inaugural Business Plan strove to improve perceptions, raise standards and promote quality. Areas of activity included regulatory advocacy, knowledge transfer and Standards development.

‘Year 2 – Development’ of Concrete NZ’s Strategic Outlook seeks to, among other things, enhance the member experience, develop advocacy capability and review the funding mechanism. The Strategic Outlook concludes in ‘Year 3 – Towards Excellence’, which will see a research programme begin, key markets grown, and the brand widely recognised.

Government relations

Concrete NZ’s Briefing for Incoming Ministers informed communication with the coalition Government; emphasising that although construction is booming, there are challenges and opportunities that the Government can help progress in partnership with industry.

Areas addressed included reducing supply constraints in Auckland, raising awareness of concrete quality schemes, promoting concrete placer proficiency, and signalling the unintended consequences of the pro-wood government procurement.

Opportunities (or threats?) in 2019

High-Level Forecasts

The National Construction Pipeline Report commissioned by the Ministry of Business, Innovation and Employment (MBIE) and prepared by Pacifecon NZ and BRANZ makes for encouraging reading once again.

In terms of its forecasts, the Report predicts sustained growth for building and construction nationally, with dwelling consents expected to exceed historic highs in 2023, and non-residential building growth expected for Auckland and Waikato.

Standards Development

A review of NZS 3104 Specification for Concrete Production is underway. Being considered are an alternative statistical approach to demonstrate compliance, adjusting the number of annual plant visits, adopting 7-day testing, and including an audit checklist and weigh scale test example as appendices. Public comment should start in early 2019.

Also in this space, is research being undertaken by Concrete NZ to assess the use of potentially reactive aggregate and European protocols for identifying the expansion threshold for aggregate blends. Once results are in, the 2.5 kg/m3 alkali limit for Normal concrete, as specified in the document TR 3 Alkali Silica Reaction (ASR), will be reviewed.

Government policy

After one year, we now have a clearer picture of the coalition Government’s policies. For instance, the proposed Zero Carbon Bill is important legislation that should deliver meaningful emissions reduction.

The concrete industry also considers the Productivity Commission’s Low-Emissions Economy initiative as positive in bringing about future emissions reduction. However, there are misgivings about proposed Industrial Processes and The Built Environment strategies, as any measures adopted must be equitable, gradual and bespoke to New Zealand.

The unintended consequences of Labour’s ‘wood first’ procurement strategy for Government buildings also need to be understood. As written, the policy would create instances where the Government’s building programme is disadvantaged by excluding safer, more cost efficient, and more durable material options. In addition, the policy would lead to a commercial advantage for one construction material over others.

It will be interesting to see the progress of KiwiBuild in 2019. Already being referred to as KiwiBuy by some, the Government has been accused of simply snapping up already planned residential construction. Concrete and concrete masonry have an important role to play in KiwiBuild, particularly their thermal performance and sound attenuation properties in medium density housing applications. New Zealanders who invest in KiwiBuild should be able to take advantage of low maintenance durable materials.

The Government could also use KiwiBuild to address the skills shortage by stipulating that trade qualified personnel are mandatory. This would go some way to creating a workforce that has the capability and capacity to meet current and future needs.

To better articulate the concrete industry’s attributes in relation to Government thinking around wellbeing, Concrete NZ will make use of the Treasury’s Living Standards Framework (LSF) in 2019. Rather than focus on financial metrics, LSF rests on the notion that inter-generational wellbeing depends on the growth, distribution and sustainability of interdependent capitals: Human, Social, Physical / Financial and Natural.

MBIE programmes

The ‘Regulator’ has several interesting initiatives underway that will impact on the concrete industry and require monitoring / input over the coming year.

Research into the seismic assessment and improvement of existing precast concrete floors stems from the performance of concrete buildings (four to 15 floors high; with reinforced-concrete structures, particularly precast floors) during the November 2016 Kaikoura earthquake. The resulting solutions will complement NZS 3101.1&2:2006 A3 Concrete Structures Standard, which recently introduced provisions to ensure new reinforced concrete buildings are even more robust.

MBIE also has a work programme in-progress focused on ensuring responsibilities and reporting requirements across the CodeMark Scheme are clear; and other accreditation requirements are fit for purpose. At the same time a review of the wider building products assurance and regulatory systems is underway.

The concrete industry will endeavour to ensure that the merits of its Plant Audit Scheme for ready mixed concrete and the Plant Certification Scheme for precast operators are fully understood by the CodeMark Scheme review.

Moving forward

Opportunities for moderate sustained growth will remain through 2019 and beyond, once again concentrated in the Auckland, Waikato and Bay of Plenty regions, and covering both residential (multi-unit) and non-residential construction.

During that time the implications of Government policy will become clearer; but progress will no-doubt be influenced by the fast approaching 2020 general election.

Regardless, Concrete NZ will strive to advance industry interests by informing debate and offering technical expertise.

 

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