Construction leaders have bleak view of sector

The construction industry is facing big challenges such as a skills shortage and issues with risk allocation. File photo / Jason Oxenham.

Key leaders in the New Zealand construction industry have a bleak view of the way the sector is performing, a new survey has revealed.

About half of the 33 people surveyed believe it is currently performing poorly, and nobody thought it was excellent.

The survey, prepared for the Constructive Forum in Wellington, also revealed the leaders believe the most critical issue facing the sector is a lack of skills, followed by risk allocation contracts and certainty of work.

The falls of major players in the industry - most recently Ebert Construction - was a low point for the sector, said Registered Master Builders Association chief executive David Kelly in his opening speech at the forum.

"We recognise that we need a whole-of-industry approach," he said.

"What's been going on in recent times demonstrates the importance of the industry working together."

Collaboration was a key theme in the morning's panel discussion around what needed to change to strengthen the industry.

"Everybody's just operating beyond capacity," said Leighs Construction managing director Anthony Leighs.

He said buildings these days were more complicated and companies were getting "really sub-par outcomes".

Southbase Construction chief executive Quin Henderson said New Zealand companies needed to get their heads around the issues, otherwise "a bunch of Australians will come in", and would not invest in the local economy and communities.

"There needs to be a greater level of collaboration," he said.

Henderson pointed to a recent article in the Otago Daily Times, in which Southern Partnership Group chairman Pete Hodgson said there was no New Zealand company that could pick up the main contract for building Dunedin's $1.4 billion hospital.

"Why can't three or four companies get together and split the job up?" Henderson asked.

Leighs believed it was "ridiculous" to say local companies couldn't build the country's key buildings.

"We've got companies in New Zealand that are sending satellites into orbit and competing against Nasa," he said.

A large issue facing the industry also revolved around allocating risk in contracts to different parties.

Ockham Residential chief executive Helen O'Sullivan said having a decent set of drawings before trying to tender was "fundamental".

Companies were agreeing to prices that didn't adequately factor in risk.

One member of the audience asked why BIM (Building Information Modelling) was not mandated in New Zealand.

BIM involves using an intelligent, 3D model-based process to help with the design and planning of a building.

Leighs said the Government could be doing "a lot more" in that area.

Creating a "genuine BIM environment where we're actually building things virtually before we build them physically" would generate better outcomes, he said.

The forum will finish this evening.