Auckland needs 7,700 more construction workers

A Westpac report predicts that 7,700 new construction workers are needed in Auckland to meet
the city’s growing housing needs

The Outlook for Auckland residential construction report is based on the average number of people per dwelling (PPD), a figure the bank has been measuring for several years.

The report predicts that to sustainably meet current demand, 10,800 houses need to be built in Auckland over the next eight years – a 30% increase on today’s levels. Westpac anticipates that that many dwellings will be consented by the July 2017 year.

The estimates are based upon the rate of change in PPD in the city. Since December 2008, PPD has risen from 2.90 to 3.02 in Auckland, indicating that there is a shortfall of new housing relative to population growth. The normal rate of change in PPD is defined as anything between -0.002 to -0.012 per annum.

The rate of acceleration has increased since 2013, bucking the national trend of the past decade. In 2013, the national average was 2.52; excluding Auckland, it was 2.36.

However, to build the number of required dwellings, Westpac predicts that 7,700 new workers will be required, 18.3% more than the 42,000 construction workers the bank estimates were working in the city in March 2015. It suggests that the majority of workers could be sourced locally, as the number amounts to just 1.7% of Auckland’s current non-working population.

Proper training required

Auckland Council building inspectors recently reported that around 33% of inspections were failing. MBIE’s acting building systems control manager, Chris Kane, says a number of strategies could be applied to bring new workers up to speed to help ensure quality.

“By attracting workers into clearly defined career pathways that offer ongoing learning and training opportunities, such as the LBP scheme and Electrical Workers Registration Board, new entrants can be encouraged to reach an appropriate level of training,” said Mr Kane.   

“Apprenticeships are running at an all-time high, and there will still be plenty of work when new recruits emerge in three years’ time. In addition, don’t forget specifically targeted courses for key skills that either are not part of a larger apprenticeship, or can stand alone.”

Mr Kane said the LBP scheme will soon have new powers, allowing it to bring new entrants to the industry, along with existing workers, up to speed with industry practice.

“Early this year, MBIE announced changes to the skills maintenance framework for LBPs. The framework moves away from a points-based elective model in favour of a mixed-model approach, comprising two new compulsory activities to ensure LBPs keep up-to-date with technical and regulatory changes relating to their area of practice.”

The scheme is designed to provide LBPs with more credible, relevant and meaningful learning outcomes. It comes into effect on 2 November 2015.

Mr Kane does not believe the government needs to intervene toattract more workers to the industry.

“Historically, the construction sector has proved very capable of adapting as demand changes. The challenge is to ensure standards of workmanship among new workers entering the sector are maintained and updated.”

Some of the strategies used to attract more workers in Canterbury during the Christchurch rebuild could be applied in Auckland to attract more workers, Mr Kane said, including:

• Increases in training new entrants to the sector.
• Facilitating the entry of skilled migrants.
• Greater use of semi-skilled labour.
• Retired workers returning to the workforce.
• Changing the methods of construction, to include more prefabrication of componentsoff site.