Some Auckland residential construction manufacturing will be allowed to resume even though the city remains at level 4 alert.
Grant Robertson, Finance Minister and Poto Williams, Building and Construction Minister, jointly announced the u-turn today.
The move follows an outcry about a building product shortage throughout New Zealand.
Although all but emergency work on construction sites mean they remain locked down in Auckland, the construction industry decried a lack of product for sites able to re-start as alert levels are relaxed elsewhere.
The Government has agreed to allow some building product manufacturing to take place in Auckland during Covid lockdown to support continued residential construction activity across New Zealand, the statement said.
Robertson said: "There are supply chain issues that arise from Alert Level 4 as building products that are manufactured domestically are mostly manufactured in Auckland. This is particularly the case for many items critical to residential housing construction, such as insulation, roofing and plasterboard."
Tonight's move to alert level 2 outside Auckland means residential construction activity can largely resume in New Zealand. However, the constrained availability of building products will be a problem.
The Ministry of Business, Innovation and Employment appears to have been the catalyst.
"On the basis of advice from MBIE and after consultation with the sector, ministers have decided to make changes to the health order to allow the manufacturer of some building products to resume in Auckland under alert level 4 - plasterboard, gypsum plaster, coated roofing steel and insulation," Robertson said.
Williams said there was a good reason for those ones.
"These are the products where there is the greatest concern about supply. We have set out criteria to assess whether manufacturing activity for certain building products can take place at Alert Level 4," she said.
"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. Plasterboard, gypsum plaster, coated roofing steel and insulation meet this criteria.
"With housing consents at all-time record highs, this change will help ease some of the building supplies constraints and support the ongoing building of much-needed houses in New Zealand in the biggest housing build programme since the 1970s," Williams said.
Last week, Grant Porteous of G.J. Gardner Homes NZ said he was concerned about manufacturers in the building sector being unable to continue and the stresses that will put on the sector and people working in it at all levels.
He said he was not immediately concerned for his business but for the thousands of families the industry provides for and for so many people midway through building, living in temporary accommodation or paying two mortgages, desperate to get into their new homes.
The problems will have also has a trickle-down effect on the housing supply, Porteous forecast.
Julien Leys, chief executive of the NZ Building Industry Federation, said Auckland staying on alert level 4 while the rest of the country's sites became active spelt big trouble.
Most supplies came from Auckland.
"Construction work allowed under alert Level 3 will run out of materials like wallboards, plaster systems, gutters and downpipes, construction glues and additives for structural concrete," Leys forecast.
Being unable to open Auckland warehouses, distribution centres and get building products out could be more serious than the Construction Sector Accord and the Ministry of Business, Innovation and Enterprise had told the Government, he says.
Most building products and materials are delivered to Auckland, then distributed from there.