New Zealand has ‘dropped off’ global supply chain

Auckland in New Zealand. Image courtesy of Vishal Makwana

New Zealand has been dropped off the global supply chain by many construction material suppliers due to the Covid-19 pandemic, according to Julien Leys, chief executive of the New Zealand Building Industry Federation.

According to reports in New Zealand, Leys said, “Before Covid the supply chain appeared to be fine, but the pandemic exposed the fact it was a lot more fragile than anybody realised. We have to find a way to manufacture things ourselves and fill those supply gaps.”

Leys also said that, in many cases, supplies were getting only as far as Australia – he added that due to Australia’s infrastructure push there was also a worry that skilled construction workers would look to leave New Zealand for their near neighbour.

A recent report from independent global construction and property consultancy Rider Levett Bucknall (RLB) also highlighted the challenges being faced by the New Zealand construction market.

RLB’s 2nd Quarter 2021 International Report says that, while the New Zealand construction market has navigated the Covid-19 pandemic well, labour shortages coupled with global supply chain disruptions continue to put pressure on construction costs.

Stephen Gracey, managing director of RLB New Zealand said, “While there was a decline in the volume of construction activity in the last quarter of 2020 and in to 2021 with a number of large projects completing, most contractors were able to trade through what has been a challenging and uncertain time and the forward pipeline of work is strong.

“That said, over the last few months there has been significant supply chain issues since the lockdown causing delays, uncertainty, and increased cost.”