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More Skilled Workers Needed to Meet Construction Demands, Expert Says
Despite the downturn in the construction sector, more skilled workers are needed to meet industry needs.
Experts claim that although construction activity has decreased over the last 18 months, there’s still a strong pipeline of work. According to the Building & Construction Industry Training Organisation’s (BCITO) acting director, Greg Durkin, this decline in numbers is merely a cooling down period from the COVID-era boom period.
Durkin claims that more, not less, skilled workers are needed in the industry to fill current and future construction work. An excessive focus on the downturn numbers can lead to a lack of training for new apprentices when a more skilled workforce is needed.
“At the peak of the boom, there was a record high of 51,015 new home consents in the year to May 2022, but that was unprecedented and beyond the industry’s capacity,” Durkin said.
“Prior to that, the all-time high for consents was 40,025 in the February 1974 year, and in the 2002 to 2008 boom, the annual high got up to about 39,000 consents.
“Yes, there’s a downturn, but it is a slowing of the market and nowhere near a recession. There is still a massive amount of work to be done, and that requires a significant amount of people to do it.”
As of late January 2024, 36,453 new homes had been consented in the nation, down 26% from January 2023. Comparatively, there were only 13,500 consents over 12 months following the global financial crisis (GFC).
Workers and training are needed to meet shifting industry demands
According to Durkin, a proactive approach is needed to ensure the construction and building industry has enough workers to meet future jobs. Additionally, upskilling its current workers is necessary to meet the changing industry.
“During the GFC, the companies that weathered the lows better were actually the ones that had trained apprentices, invested in staff, and had a highly skilled workforce.”
“This will be true today too, as where the work is, and the type of work going on, is shifting around. There is more demand for townhouses than standalone houses, for example.
“We are also seeing a bit of an uptick in residential sales, and that is a significant trigger for renovation work because people renovate to sell, as well as after they have bought.”
Durkin said that the conservative approach that followed the GFC had left the construction industry with a massive labour and skilled shortage, ultimately slowing down the nation’s infrastructure development for years.
He also forecasts that non-residential buildings in the private and public sectors will bring in more work and surpass current worker capacity.
The Apprenticeship Boost scheme’s future uncertain
To support industry recovery after COVID-19, the New Zealand government introduced the Apprenticeship Boost Scheme. This scheme pays employers incentives that will enable them to retain and take on new apprentices.
The scheme has played a big part in increasing the number of apprentices in the building and construction sector. According to BCITO, 17,199 people are currently doing their apprenticeships, and 4130 people are completing their training through BCITO alone.
However, the scheme is said to end late this year, with its future still uncertain.
“The key takeaway is that if the sector is to deliver on what is required, we need to keep training,” said Durkin.
Julien Leys, Building Industry Federation’s Chief Executive, echoes this statement, stating that it would be disappointing if the scheme was not continued.
“We need to have people coming through, and we need to have more diversity, and especially more women getting into the industry.”
According to Leys, the construction sector is primarily comprised of small businesses that might employ less than five people. Small builders are requested to build almost half a dozen houses a year and would need upskilling support.
“They are the ones that need to bring on apprentices and need the support to do that, and that is where the scheme has been very helpful and had a positive impact on numbers.”
Recently, the government has begun disestablishing Te Pūkenga, a decision that caused uncertainty about the future of apprenticeships in the industry. According to Malcolm Fleming, Certified Builders' Chief Executive, more government-industry consultation is needed to review apprenticeships and vocational structures.
“For trade-qualified builders, a commitment to training the next generation of carpenters via the traditional apprenticeship model is considered close to sacrosanct.”
“It is critical to achieve industry buy-in and to provide quality training for the next generation of tradespeople entering the industry, and to build the skills that New Zealand needs,” Fleming said.
Builders and construction businesses should capitalise on this market and continue upskilling their workers, as well as look at more opportunities in the year ahead.
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