The civil construction industry say the Government must lower the high minimum pay requirement for migrant workers if it’s to get enough skills into the country to tackle a mountain of infrastructure work.
Peter Silcock, chief executive of Civil Contractors New Zealand, said new immigration settings suggest a worker’s salary must be above $106,000 before they will get a visa.
But many of the people with the skills needed, particularly in middle management, were earning around $80,000.
A state of the industry survey released on Friday showed that labour was civil construction’s number one challenge, followed distantly by certainty of project timings.
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There were also delays getting materials due to global supply chain issues, but by far the biggest issue was labour.
“We’re already doing quite a bit of work in that area but we clearly need to do more,” Silcock said.
The industry has enjoyed a surge in apprenticeships in the last year, doubling to around 1000 people, but it will take a few years before they are fully trained.
In the meantime, Kiwi workers are already starting to drift back to Australia, which also has a big infrastructure programme and higher pay rates.
Auckland Council has signed off on its record $32 billion 10-year budget. It aims to support the city’s recovery from the impacts of Covid-19 and deliver on important infrastructure needs.
The answer was not to throw the doors open to unskilled workers, Silcock said.
“What we need to do is tweak those settings … and make sure we’ve got people coming in with the specific skills that we need to see those projects through.”
Timing was also a big issue for civil firms. Projects could be delayed for months, due to client decisions, a shortage of materials or people, and all of that muddied an already unclear pipeline of projects.
“We all know there’s a lot of work coming up in the water and wider transport space – not just building roads, but it’s cycleways, it’s rail, bus lanes and those sorts of things … but it’s certainty of when that work is going to occur.”
Infrastructure was also about maintenance, not just about big projects, Silcock added.
“If you’re running a big Government project, there is a criteria to bring people in, whereas if you’re maintaining the city’s water pipes, the criteria gets back to the $106,000.”
Infrastructure work in New Zealand is forecast to be worth $10.1 billion by 2025, with transport, water and subdivision projects dominating the pipeline already.
The Government’s Three Waters project expected to pour another $120b to $180b of investment into the industry over the next 30 years.
Unsurprisingly, 50 per cent of those polled were optimistic about the construction industry and over half predicted higher turnover (55 per cent) and staff growth (66 per cent) in the next 12 months.
But the number of respondents concerned about skills shortages and labour doubled to 50 per cent and 87 per cent said they would hire immediately if the right skills were available.
Respondents said the areas which could most benefit the industry were developing a clearer pipeline of work, large projects under the NZ Upgrade programme, and regional projects under the Shovel Ready Projects programme.
Jim French, a construction industry specialist for Teletrac Navman, said firms had called “loudly and clearly” for certainty over the pipeline of work from local and central government.
“However, the lack of clarity impacts their planning for manpower and resources in these uncertain times. Covid-19 still affects the industry, as border closures dampen hiring outside talent and delay the supply of building and construction materials.”
To those interested in getting into civil construction, Silcock said technology was an increasing part of the industry and many tasks were electronically done. Drones and GPS were increasingly part of the work.
“This is not just digging a hole, you can use some very cool technology.”