Number of cranes goes sky-high

The RLB crane index revealed a record number of cranes across Auckland and the rest of the country. Photo / File

The construction boom is seeing an unprecedented number of cranes rise across New Zealand's cities, according to research released today.

The Q2 2017 RLB Crane Index revealed a record 132 cranes towering over New Zealand's cities, with Auckland alone accounting for 72.

"In Auckland, in particular, strong economic growth driven by high inward migration and increasing tourist numbers, along with solid housing activity, manufacturing and consumer spending, has seen the rock star economy continuing to drive the construction industry, where demand is stretching the current supply," said Chris Haines, Rider Levett Bucknall's Auckland Director.

"Auckland continues to dominate New Zealand skies with 72 long-term cranes, 55 per cent of all cranes observed across the seven key centres," Haines said.

"The current index highlights a 13 per cent increase in the number of cranes within the Auckland region since the last count in Q4 2016. Twenty-three new cranes have been erected and 15 have been removed from projects that are nearing completion."

Construction work put in place increased by 20 per cent in the 2016 calendar year, making it the fifth consecutive year of growth.

The Sky City Convention Centre, a Fletcher Building project, sports 4 cranes alone.

However, experts have warned that continued growth in the construction sector comes with heightened risks.

Chris Hunter, the chief at Auckland-headquartered builder NZStrong, and Tony Maginness, a director of accountant and insolvency specialist Staples Rodway, warned of many risks.

Last month, Fletcher Building - New Zealand's biggest builder - issued a guidance for a $110 million annual operating profit downgrade and the McConnell family has agreed to sell the country's second biggest builder, Hawkins, to Downer EDI.

Hunter said the risks facing the sector were extremely high.

"This is the most dangerous time in our construction cycle. Our supply chain pricing is going up so fast. There's rapid cost escalation in the construction sector and it's putting us at risk if we're not careful with our bidding," he said.

"People are trying to offload the risks to the builder. We're happy to take some risk but we can't take it all on."

Maginness was also concerned.

"We are experiencing arguably the biggest construction boom in New Zealand history, with the number of projects putting growing pressure on construction firms and its supply chain to deliver," he said.

"There are simply not enough resources to meet this demand, with subcontractors, labour and materials shortages having a significant impact on the ability of construction firms to meet deadlines. Some companies are over trading and are becoming victims of their own success."

There was talk of poor workmanship beginning to creep in as a result of the lack of skilled labour available, Maginness said.

"Fletcher Building is a publicly-listed company with a very strong balance sheet, but they are experiencing complexity and delays on major developments," he said.

"They have to publicly disclose their issues which is why we have been made aware of this. There may be construction firms in the same boat that we are not hearing about."

Additional reporting from Anne Gibson