A bird’s-eye view of the country’s essential concrete industry. Rob Gaimster, CEO, Concrete New Zealand.
CONSTRUCTION IS BOOMING, and concrete has never been in such demand. Most industry metrics, backed-up by a range of forecasts, indicate that the overall buoyant mood and level of activity across most of the country in 2017 will be replicated in 2018.
The continued growth in work across wider Auckland was a stand-out during 2017, as it was in the Waikato/Bay of Plenty region, which is now clearly leveraging the activity taking place to its north. National ready mixed concrete production figures show most quarters reaching over one million cubic metres, with most regions enjoying growth or sustained high levels of output.
There were, however, some indications of growth levelling off, with the value and volume of all building work put in place, along with the value of non-residential building consents, reaching a plateau. A clear softening of construction activity across the Canterbury region was again evident in 2017.
A range of exciting concrete-based projects were unveiled during 2017, outstanding in terms of their intricacy, size, sustainability and aesthetics. For instance, the Waterview Tunnel opened to universal acclaim, with Auckland motorists grateful that the concrete lined piece of roading infrastructure delivered on its many promises.
Another important roading project that opened in 2017 was the Mackays to Peka Peka Expressway on the Kapiti Coast. The Expressway’s complex geometry, the site’s high seismicity and its extremely compressible and potentially liquefiable soils, were among the unique challenges overcome using concrete.
Following on from the ‘settling-in’ of a new national cement supply network in 2016, which saw GBC Winstone and Holcim New Zealand move to new storage and distribution models, 2017 witnessed the wider concrete industry demonstrate a strong commitment to increased capacity.
Additional ready mixed concrete plants were established in Christchurch and around the Auckland region. Most recently Firth Industries opened its $30 million Hunua masonry block plant west of Papakura, which will go a long way to meeting strong demand for housing and infrastructure in the Auckland region.
The Canterbury earthquakes showed that some aspects of the current design standards needed updating. The Canterbury Earthquakes Royal Commission of Inquiry made several recommendations to amend NZS 3101:2006 Concrete structures standard following the quakes.
Similarly, a recent investigation into the performance of Wellington’s Statistics House following the November 2016 Kaikoura earthquake recommended some actions specific to NZS 3101 – namely the impact of beam elongation on precast floor systems, maintaining composite connection of the precast flooring to the in-situ topping, and precast floor support details.
Both sets of recommendations were addressed with the August release of NZS 3101 Amendment 3, which will be cited shortly. The Cement & Concrete Association of NZ (CCANZ) has a long involvement with the NZS 3101 Standards Committee.
The New Zealand concrete industry came together in 2017 to promote concrete as the resilient construction material of choice for a modern New Zealand with the launch of a consolidated industry association, Concrete NZ.
Founding member organisations of Concrete NZ are the Cement & Concrete Association of NZ (CCANZ), the NZ Concrete Masonry Association (NZCMA), the NZ Ready Mixed Concrete Association (NZRMCA), Precast NZ (PCNZ) and the NZ Concrete Society (NZCS).
Concrete NZ aims to be a highly respected and valued association, supporting industry to position concrete as the resilient construction material of choice for a modern New Zealand. This will be achieved through a consolidated voice that brings confidence, knowledge and leadership to members, industry and regulators.
Opportunities (and threats) 2018
Despite a softening of the Canterbury construction market, the National Construction Pipeline Report, commissioned by the Ministry of Business, Innovation and Employment (MBIE) and jointly prepared by Pacifecon NZ and the Building Research Association of New Zealand (BRANZ) makes for encouraging reading once again.
Key findings in the report are that the national building and construction forecast shows a higher peak with a longer duration than previously forecast, that growth in non-residential buildings is forecast to continue for longer and to a higher level than previously forecast, and that growth in building and construction in Auckland is expected to be sustained for a longer time than in other regions.
After nine years of stable government under various National-led coalitions 2017 saw power shift to the Labour Party. While the Labour election platform was relatively clear, there is uncertainty about the practicalities of policy implementation and how NZ First and the Green Party’s demands will be met.
For instance, Labour has declared that it “will take a breather on immigration”. This will involve “making sure that work visas are not abused to fill low-skill, low-paid jobs”. While there is talk of introducing ‘Exceptional Skills’ and ‘KiwiBuild’ visas, the construction industry should be concerned as to where skilled workers, required to meet current and anticipated demand, will be sourced from.
Further details are also required from Labour around its Forestry policy, and its ‘wood first’ procurement strategy for government buildings. While the concrete industry appreciates the important role forestry plays in our economy, as well as the characteristics of wood as a building material, there is serious concern as to the unintended consequences of a ‘wood first’ policy.
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. Materials should be selected on their own technical, cost, aesthetic and sustainability credentials.
Questions also need to be asked around whether the ‘wood-first’ policy will be applied to the KiwiBuild initiative. The concrete industry applauds KiwiBuild, and its pledge to deliver 100,000 affordable houses over 10 years for first home buyers. However, if the decision is made to arbitrarily specify timber over other materials, then New Zealand may be short changed.
Another potential unintended consequence of government policy could be the decision to provide “one year fees free full-time equivalent for everyone starting tertiary education or training for the first time from 1 January 2018, and extending this to three years’ free by 2024”. Industry training organisations have been quick to point out that while well intentioned, this policy could encourage students away from trade training towards university study.
As with 2017, there is a concern that a construction skills shortage could threaten the industry’s ability to maximise opportunities. One strategy to address this is to have more people enrol in qualifications. The Building and Construction Industry Training Organisation (BCITO), in collaboration with industry, has been implementing Workforce Development Plans to help create a workforce that has the capability and capacity to meet current and future needs.
Another skill-related concern that impacts on the haulage industry and therefore the ready mixed concrete sector, is the lack of Class 3 and 4 drivers. This has been an issue for years, particularly in Christchurch, and is now becoming a limitation in Auckland.
The 2018 year looks to offer growth opportunities for the concrete and wider construction industry in a similar manner to the past several years.
This activity will focus predominantly on the Auckland, Waikato and Bay of Plenty regions, with growth most evident in non-residential buildings.
However, a degree of uncertainty exists around the influence, intended or otherwise, of the new Labour led government’s policies.