The outlook for the commercial construction sector in Dunedin looks “healthy” as more consents spur a “steady pipeline of work”.
The latest Infometrics quarterly economic monitor, to March 2019, was released this week, showing non-residential consents – including the construction of new commercial buildings – were up 17.5% in Dunedin for the year to end of March, compared with 7.6% nationally.
The data, sourced from Statistics New Zealand, represents $84million worth of non-residential building activity across the city.
Infometrics senior economist Nick Brunsdon said the “steady pipeline of work” could pose challenges for contractors, raising concerns about whether they were capable of delivering all of the required work.
“Although consent values continue to rise, capacity pressures remain, and we are concerned over the sub-industry’s ability to convert these consents into completed work.”
Dunedin commercial construction company Naylor Love was delivering some of the work in the city.
Naylor Love regional manager Jason Tutty, of Dunedin, said the work includes simultaneously running three large commercial building projects for the University of Otago in Dunedin.
At any one time, up to 100 staff could be on site, building a new studio facility for the School of Music on the University of Otago campus in North Dunedin.
The project started in August last year and was due to be finished in February next year.
About 100 more staff were working on a bigger Naylor Love project – a research support facility for the university.
The facility was near the third Naylor Love project, the new dental school.
The main contractor on the project is Leighs Cockram JV – a joint venture company made up of Christchurch-based Leighs Construction and Australian-based Cockram Construction.
“Over the last year, finding staff hasn’t been a problem but it’s getting harder and forecasts are for it to get even harder.”
To combat the skill shortage, Naylor Love was recruiting apprentices and working with other parts of the trade sector to attract more resources to Dunedin.
The increase in non-residential consents was “a good indication of a strong commercial construction market”.
However, trends over several years gave a better understanding on the state of the industry.
Commercial construction in Dunedin for the year up to the end of May had been “steady rather than spectacular”.
“But the forecast is very buoyant for an exciting few years in the construction sector, due to all the upcoming projects in Dunedin.”
The projects, including the Dunedin Hospital rebuild, made for a “healthy” outlook for the commercial construction sector in the city.
He expected businesses across the trade sector to get work on the hospital rebuild but it was too soon to discuss the share of work any company would get.
“There’s a lot discussions going on and a lot of options – but it’s too early to tell – I think there will be plenty of work for everybody.”