Increased supply pressures reported for home building projects in Auckland

Respondents were asked about their perceptions of COVID-19’s impact on building projects in the December 2020 quarter, Stats NZ said today.

About 6 out of 10 respondents from home building projects in Auckland reported an impact on the availability of materials and/or equipment. This was the most common issue in the December 2020 quarter for these projects and was a slight increase on the September 2020 quarter. An impact in at least one of the five categories available (cashflow, cost, availability of labour, availability of materials and equipment, and on-site productivity) was reported by around 7 out of 10 respondents of home building projects in Auckland.

Residential (Auckland)Residential (NZ excluding Auckland)Non-residential (Auckland)Non-residential (NZ excluding Auckland)
Cashflow40222721
Cost54313530
Labour51322830
Materials62484140
Productivity56374136

Respondents that reported supply issues were most likely to mention delays and price increases in their comments.

Spending on international sea and air transportation services has risen from a low level in the June 2020 quarter.

See Sea and air transport values rising.

“The record levels of new homes consented in Auckland in 2020 means that demand for materials and freight will be up,” construction statistics manager Michael Heslop said.

The number of new homes consented in Auckland in 2020 was 16,656, which was an increase of nearly 10 percent from 2019.

See Building consents issued: December 2020.

The total value of residential building activity in Auckland was $1.9 billion in the December 2020 quarter. Nationally, residential building activity held up in the December 2020 quarter, while non-residential construction has slowed down.

See Commercial construction slows, residential holds up.

Respondents from home building projects in Auckland were also more likely to report a moderate to severe impact from COVID-19 in the December 2020 quarter than other projects. Both stand-alone houses and multi-unit home projects saw similar levels of impacts.

Moderate to severeNone to small
Houses (Auckland)5050
Multi-unit homes (Auckland)4852
Non-residential (Auckland)3268
Houses (NZ excluding Auckland)3466
Multi-unit homes (NZ excluding Auckland)3169
Non-residential (NZ excluding Auckland)3070

Apart from supply-side issues faced by residential projects in Auckland, the impact of COVID-19 appeared to have dropped in the December 2020 quarter in most categories.

The percentage of respondents for non-residential projects that reported COVID-19-related issues with costs and productivity dropped by 19 percentage points in the December 2020 quarter, compared with the September 2020 quarter.

Residential (Sep 2020)Residential (Dec 2020)Non-residential (Sep 2020)Non-residential (Dec 2020)
Cashflow47403927
Cost60545435
Labour55514028
Materials57624441
Productivity69566041

Results from the June 2020 quarter survey showed many building projects had reported delays due to COVID-19. These delays were mostly coming from shifting COVID-19 alert levels and in particular the level 4 nationwide lockdown, directly impacting productivity. Delays experienced in the December 2020 quarter were now more likely to come from resource constraints, particularly with labour and materials.

See Impact of COVID-19 on building projects.

Feedback

Stats NZ welcomes your feedback on the current, and possibly future, work on COVID-19’s impact on the construction industry. You are encouraged to comment on:

  • how useful this information is to you
  • how you might use this information
  • any other information you would like included
  • any enhancements that would make these estimates more useful
  • any other suggestions for improvement.

To send your feedback, or if you have a technical enquiry, please contact Michael Heslop at michael.heslop@stats.govt.nz or Adriaan Lotter at adriaan.lotter@stats.govt.nz.

COVID-19 alert level timeline and implications for construction

All non-essential work stopped during the alert level 4 lockdown. Construction was allowed to continue at alert level 3 and below, although each level had its own requirements and implications.

For information on COVID-19 and construction see the COVID-19: Building and construction sector guidance from the Ministry of Business, Innovation and Employment (MBIE).

Methodology

The insights shared here reflect the opinions of respondents to the Quarterly Building Activity Survey. A total of 5,119 building projects were included in this analysis. Around one-third of these projects were in Auckland.

Additional questions were included in the survey for the first time in the September 2020 quarter. These were included to better understand the perceived impacts of COVID-19 on building projects, and the ways in which building projects have been impacted. As a result, direct comparisons on impacts and impact severity is not possible with results from earlier quarters.

These insights do not reflect any information around how survey respondents may be responding to COVID-19 and its effects, or how their perceptions relate to the value of building work put in place. The effects of COVID-19 are varied and often project-dependent, and results may change over time as circumstances and perceptions change.

Building projects may take many quarters to complete, so it is possible that some responses could reflect the impact of COVID-19 across multiple quarters.

/Stats NZ Public Release. This material comes from the originating organization and may be of a point-in-time nature, edited for clarity, style and length. View in full here.