Covid 19 coronavirus: One-third of construction sector jobs at risk, says Infrastructure NZ

Many New Zealand infrastructure companies are within weeks of insolvency, putting as many as 30 per cent of the jobs in the sector at risk within the next three months unless a staged return to work can be arranged, the sector's main industry body has warned.

That loss of nearly one-third of staff in three months refers to contracting and construction companies, while firms providing advisory and other support services could expect to be in the same critical position within six months, said Infrastructure New Zealand chief executive Paul Blair.

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"Many infrastructure companies are talking about weeks rather than months before they risk insolvency. Several have already taken extraordinary measures to cut salaries and reduce employee hours," he said.

During the government-ordered four week lockdown - which started at midnight last Wednesday to stem the spread of the Covid-19 virus - construction companies can only work on essential or critical infrastructure or carry out work required to address immediate health or life safety risks.

Blair said the industry was hoping that on-site health and safety measures employed in countries like Singapore and South Korea, where Covid-19 containment appears to be succeeding and construction sites have remained open, can be equally successfully applied here.

"Increased and ongoing government subsidies might tide the industry over, but the clear mood of the sector is for a staged reduction from level 4 to 3 and down off the alert system," he said.

Prior to the lockdown of all non-essential services, non-residential construction had been strong,

Stats NZ figures released today show the annual value of consented non-residential building work for the year to February was $7.3 billion, up 2.3 per cent from the February 2019 Planned spending on offices, administration and public transport buildings lifted 8.4 per cent to $974 million in the year.

The lockdown, however, has hit the sector hard, with a dismal reading in today's business confidence survey from ANZ Bank.

Across the economy, a net 63.5 per cent of all types of businesses expect worse times ahead, compared to 19.4 per cent in February. For the construction sector, it was a net 67.6 per cent negative, from neutral in February.

Commercial construction intentions plunged, reversing to a net 21.9 per cent expecting not to increase construction, from the 26.1 per cent who had been expecting an increase in the February survey.

If the sector could agree on measures around personal protection during the next three weeks, the most essential construction projects could move down to level 3, allowing work to restart, said Blair.

"The infrastructure sector will be essential to New Zealand's rebuild and recovery. If we can mitigate infection risks and provide for a staged return of construction, New Zealand can emerge from this crisis as quickly as possible," he said.