26 Aug 2021

Construction sector battling inflation, lack of staff and materials

From Nine To Noon, 9:20 am on 26 August 2021
New builds in Selwyn area

Photo: RNZ / Nate McKinnon

A new report highlights major challenges for the construction sector - including inflation, a lack of skilled staff and material shortages -and that's before lockdown level 4 shut it down. 

The Accounting & Advisory Firm BDO's fourth annual Construction Report surveyed shareholders, directors, head contractors and sub-contractors from residential and commercial construction industries. 

60 per cent of respondents were concerned about rising material costs, and the availability of important materials. Over half had issues with finding skilled staff, and labour costs. 

The report says the frequent and significant rises in costs faced by builders and the current fixed contract environment are likely to lead to more businesses failing, despite the fact that there is a massive housing shortage and high demand for construction.

Kathryn speaks with BDO Partner and construction specialist James MacQueen about the report's emphasis on inflation pressures.