Upturn in construction imminent

More skilled staff will be needed to rebuild Christchurch. Picture / Getty Images

Despite Europe worries, industry should soon be healthy, writes Helen Frances

Another building boom is on its way - it is just a matter of when, say industry leaders Ruma Karaitiana, chief executive of the Building and Construction Industry Training Organisation (BCITO), and Peter Gomm, Mainzeal's chief executive.

The ingredients are already here - Christchurch's post-earthquake repair and rebuilding, "pent-up" and normal demand for houses, and leaky building remediation, notably in the Auckland region.

Building companies that made it through the recession should be gearing up through 2012 for a boom likely to hit in 2013, says Karaitiana.

An Infometrics forecast made in July 2011 expected, for example, that new, post-earthquake house-building in Canterbury would accelerate most rapidly between June 2012 and June 2013, with activity peaking by September 2014; 95 per cent of the work is likely to be completed by March 2018.

Non-residential construction is also expected to rise from 2012 in Christchurch. Work on infrastructure has already been significant and will continue to grow - both in Christchurch and nationally, with special government funding for motorways and projects such as Muldoon's Corner (Rimutaka Hill Rd.)

Karaitiana hears anecdotally that reasonable uptake of leaky building packages is expected and that the industry is fairly optimistic, despite the likely slowing effects of the European financial situation. He says timber manufacturing, pre-framing, cement, concrete and steel industries will be busy once activity picks up.

He sees 2012 as a time to build up resources - training apprentices and upskilling experienced staff to manage increasing activity from 2013 onwards.

"We've been trying to deliver two key messages to builders out there," Karaitiana says.

"They need to look at ... training their good people in supervision skills so they are able to handle new people when they arrive, and ... consider what their plan is for staffing for 2012 and 2013. If they leave it till late in 2012 there won't be any people available.

"This is the time to enter the industry because there is 10 years of intensive activity ahead."

Highly qualified and skilled people always have jobs during less busy times in the industry, he says. But timing is crucial for those considering training now. Polytechnics, particularly in Christchurch, are "jam-packed" with people doing pre-trade courses, most finishing around December. The industry is not yet ready for them, but all will be needed eventually.

For now, "we want [newcomers] to come in with their eyes open and schools to think about timing as well. It's probably better for people in school at the moment who are thinking about joining the construction industry to either stay in school and concentrate on literacy and numeracy, etc, or to look at trade academies as another option before moving forwards."

Builders are problem-solvers. In Christchurch, where getting insurance has held up construction processes, Karaitiana says Stonewood Homes has taken a creative approach and arranged insurance itself - an example he thinks competitors are likely to follow.

Mainzeal Construction has also been thinking smart, weathering the recession and using the time to develop its business model. CEO Peter Gomm says the company changed its business model before the downturn.

"We had a broad-based national business that was a series of businesses, rather than one business."

Mainzeal tightened the structure, ensuring there was one team working to one strategy across New Zealand, while recognising the importance of local representation.

The shift from being a contractor to a full service provider has changed the way people in the company think and act. They take part much earlier in the decision-making processes of construction projects.

"We are trying to take the work face to the boardroom - providing the continuum throughout our business," Gomm says.

Employees with site-level expertise are contributing to key decisions, such as how a project will be constructed, and how to influence design to make it more cost-effective and reduce the risk during the billing process.

"Post-GFC [global financial crisis] is a very different market for us all and everyone wants more for less," Gomm says. "To get better value for money is all about reducing wastage - every step of the process from concept through to documentation through to construction and operation of the building. [So] you make sure the dollars are spent right the first time."

"Building Certainty" is Mainzeal's tagline and the company has taken that to work in Christchurch with engineering design firm MWH, appointed by Vero as project management office (PMO).

"We have focused on keeping our core people and, as a result of the Vero PMO, we have recruited quite a few people."

Gomm is cautious about predicting when the market will pick up; 2013 should see a material change, but he needs more evidence.

"Now is the time to start getting a broader training for people. We like to think we'll be ready when things improve."