Crane index shows resilient construction market

Despite the lockdowns, delays in material supply, increased shipping costs and pressure on local labour resources due to the impacts of COVID-19, Auckland’s construction market has proved remarkedly resilient with the net addition of 18 construction cranes on projects over the past six months.

According to the recently released Q3 2021 RLB Crane Index®, New Zealand has now 144 long-term cranes on construction sites across the seven main centres, up from 136 in Q1 2021: 96 cranes in Auckland, 16 in Wellington, 14 in Christchurch, 8 in Queenstown, 5 in Tauranga, 4 in Hamilton, and 1 in Dunedin.

Rider Levett Bucknall director Chris Haines said: ‘‘Auckland’s status as the engine room of New Zealand continues with its 96 cranes accounting for two thirds of the 144 cranes sighted across the main centres in the country.

‘‘Construction in the city has certainly bounced back strongly which is a combination of a buoyant residential sector and a strong civil infrastructure sector and includes some ‘shovel ready’ projects now on site, together with projects such as the City Rail Link and Watercare’s Central Interceptor.’’

‘‘With construction activity recommencing a few weeks ago across the country and Auckland now in Level 3, materials shortages remain a key issue for the industry as they were before lockdown. ‘‘Level 3 protocols may have only a modest impact on productivity on construction sites, but materials will be a key focus for contractors.’’

The latest RLB latest Crane Index showed 61 long-term Residential cranes across NZ, the same number as Q1 2021 with the previous high of 57 being in Q3 2018.

The construction market in Wellington remains buoyant with a strong and reliable pipeline of government related work.

The removal of all cranes from the Health and Hotel sectors resulted in a total of 16 long-term cranes now on projects compared to 18 on projects in the Wellington region in the previous count.

Supply chain constraints and limited market capacity remain significant issues in the Wellington market which is being impacted by escalating costs and longer construction durations.

In Auckland, there has been a high churn-rate of Residential cranes with 19 removed and 19 put in place of the last six months. The sector remains strong but current supply issues and escalation pressures are making fixed pricing and lump sum prices sometimes challenging in the market.

The Non-Residential sector accounts for 83 of long-term cranes across New Zealand, up from 75 in Q1 2021. The Civil and Infrastructure sector has reached 28 longterm cranes, a new high, up from 25 cranes in Q1 2021. The Retail and Commercial sectors, which account for only 19 cranes across NZ is significantly down from the high of 47 in Q3 2018.

Apart from Auckland’s buoyant construction market, the majority of the country’s centres recorded a slight decrease in the number of cranes sighted over the past six months.

Christchurch’s crane activity for the Q3 2021 has fallen for the first time since Q1 2019. The city saw the addition of three new long-term cranes, while four were removed from projects across the region resulting in a net decrease of one crane, bringing the long-term count to 14.

Despite the impacts of COVID-19, and initial forecasts of significant drops in building activity, the twelve months to March 2021 has seen only a 1.1 per cent decline in total building activity across the country. This was mainly seen in the non-residential sectors which decreased 8.9 per cent. This was offset by a strong rise in residential activity of 3.4 per cent.

Haines said: ‘‘The forward pipeline remains very strong with building consents for the country up by 17.7per cent for the twelve months to June 2021. Total consents for the twelve months totalled $26.4b, up from $22.5b for the twelve months to 30 June 2020.’’