Housing construction has been hampered by delays in materials. Photo / NZME
Relief from a drought of building materials that has "crippled" the Bay construction sector's post-lockdown recovery may be in sight after a Government rule change.
But builders say they will still be playing "catch-up" and delays may continue as some supply chains remain backlogged with manufacturing hub Auckland in lockdown as the rest of New Zealand moves to Covid-19 alert level 2.
Bay of Plenty builders spoken to by NZME in recent days said some building sites were at a standstill and homebuyers may bear the brunt of delays and material costs.
One builder said a lack of materials left the Bay of Plenty with a "profitless boom" that could be fatal for some businesses.
GIB, steel framing, roofing, timber, wall linings and fixings are in short supply and by Friday those products were expected to run out completely.
The Government has previously said only essential products could be manufactured at level 4, and having too many businesses operating increased the risk of Covid-19 spread.
The industry had been lobbying the Ministry of Business Innovation and Employment for exemptions to Auckland manufacturers who supply 90 per cent of the building products needed in the regions.
Yesterday, Minister of Finance Grant Robertson said the Government would allow some building product manufacturing to take place in Auckland in level 4 to support continued residential construction in New Zealand.
Robertson said the "constrained availability" of building products was an issue for regions in level 2.
Changes to the Health Order would be made to allow the manufacturer of plasterboard, gypsum plaster, coating roofing steel and insulation in Auckland under level 4, he said.
Minister for Building and Construction Poto Williams said there was the "greatest concern" about supply for these products.
"The products must be a critical component of residential construction, there is limited supply and manufacturers must have health and safety measures in place to minimise the risk of Covid-19 transmission."
Williams said the change would help ease some of the building supplies constraints and support the ongoing building of much-needed houses.
Registered Master Builders vice-president Johnny Calley, of Calley Homes in Tauranga, said earlier this week "large quantities of materials had already run out and if they haven't run out yet they will by the end of the week".
"We have projects directly affected by the shortages at a standstill."
He said consumers would be impacted as financially pressed builders passed on material costs through their contracts.
The scenario could be "fatal" to businesses that could not absorb the costs and other issues like the skilled labour shortage, which meant the industry was in a "profitless boom", he said.
Calley told the Bay of Plenty Times yesterday the exemptions were "a good start" but the "net had to be cast wider" to address the issue of a lack of material supplies.
"It's put a plug in a barrel full of holes, but there are still a few holes in that barrel," he said.
"It's positive to hear they've made an exemption for some selected products and that will have a good effect on some of those material lines."
"It is still going to take some time to meet the demand across the country. The Bay of Plenty will be in the queue with everyone else as they start production again," he said.
Classic Builders director Peter Cooney said earlier this week the impacts would have a severe effect if Auckland's businesses did not get back up and running.
In response to the exemptions, Cooney said yesterday they would "certainly help" but it was only a "small portion" of the issue.
"You've got the plumbing side of it, PVC piping ... the electrical side ..."
"All major manufacturing plants supplying materials for housing need to be operational.
"It needed to happen, it's great that it has happened, but it should never have shut down in the first place because it really is going to cost the country an awful lot of money, and it's going to force the prices of materials to go through the roof."
"There are issues around a catch-up now to get going and it's whether we can catch it up," he said.
In response to Cooney's comments, Robertson said the decision on products was based on the Ministry of Business, Innovation and Employment's investigation and consultation with the sector on where supply was "significantly constrained" and which products were "critical".
"The changes strike a balance between maintaining our alert level 4 response and supporting the residential construction industry," he said.
"Limiting the movement of people is key to New Zealand's success in containing the Delta strain of the virus, and moving the Auckland region to lower alert levels."
Registered Master Builders Tauranga president Rik Flowerday said the change was "great news. "On to the next problem."
He previously said he had houses at a standstill as without GIB and Pink Batts, "you can only move a house so far along".
Mark Fraser-Jones, director of Bay building company Venture Developments, said earlier this week it was hugely frustrating "that this Government will, on one hand, open the regions up for business but cripple it with another hand in not providing a supply chain".
"Surely with the never-ending rhetoric around our housing supply shortage, MBIE would be prioritising the construction sector, not crippling it."
Fraser-Jones has been contacted for comment regarding the Government announcement.
A Fletcher Building spokeswoman said the company was working towards recommencing manufacturing for the relevant products covered by the exemption.
"This will be done under strict health and safety protocols to ensure the safety of our team and community," she said.
"We are aiming to replenish stock levels across the country as quickly as we can with the plan to begin dispatching products by Monday."
Nigel Tutt, chief executive of economic development agency Priority One, said the change was "an important win for the industry".
"It will help - it doesn't fix the issue. There are wider and more complex challenges in terms of [the] supply chain and labour ... but every little bit helps with these strange times."
MBIE will consider requests from Auckland building product manufacturers who want to operate in level 4 with the minimum safe staffing.
The Ministry will provide more information on the process today.
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