1 Sep 2021

Building industry fears shortages if supplies remain stuck in Auckand

12:47 pm on 1 September 2021

Thousands of building sites are reopening today amid warnings common products could run out within days.

Fixing plumbing system in bathroom close up view

plumbing Photo: 123RF

The construction sector says the government has failed to understand how damaging it will be to have warehouses jammed full in Auckland while most of the country at level 3 cries out for products.

About half the country's building sites are now within level 3 zones and able to reopen.

"Businesses operating under alert level three in the rest of the country will find themselves very quickly without products to continue construction with," Plumbing World chief executive Rob Kidd said.

Plumbing World branches were fully stocked going into level 4, but like many other construction suppliers up to 95 percent of his products are still in Auckland.

They had anticipated, wrongly as it turns out, that supply to level 3 areas would restart while applying Covid protections, Kidd said, who learned to the contrary yesterday afternoon.

The level 4-level 3 split was unprecedented, he said.

"Some products will run out in a matter of days ... three or four days.

"We've never had this problem before."

Master Plumbers chief executive Greg Wallace said they only found out when they asked the Ministry of Business Innovation and Employment (MBIE) about it and were told it was for Cabinet to decide yesterday.

They had assumed suppliers who were already distributing essential products such as hot water cylinders, would simply expand what they sent out, Wallace said.

"So yesterday there was a big panic about how we were going to get the product suppliers ensuring that the supply chains remained open."

Pink Batts national sales manager Joanne Duggan said the company could not manufacture in Auckland, or supply from there, and was working with MBIE to get an exemption.

"Everyone appears to be in the same boat," Duggan said.

The manager of a major plaster products manufacturer with its plant in Auckland, called the MBIE yesterday to ask for an exemption to operate but nothing had come back since.

"Even if we had alternate manufacturing, six hours' notice would never have been enough time to stock pallets, packaging, and essential raw ingredients to this location," the manager said.

The hold-up hit raw material suppliers too, and the fallout would continue. The costs of supply and re-stocking, involving and manufacturing overtime, and the shortages, would be significant, the manager said.

building supplies, plasterboard wheelbarrow, construction

Even before the latest lockdown companies were expecting the prices of some building items to rise. Photo: 123RF

Plasterboard, electrical products and concrete strengthening additives might also run out within days, Building Industry Federation chief executive Julien Leys said.

"I don't think anyone within MBIE and the government quite appreciates the seriousness of the situation. I don't think they understand it. I think they are choosing to ignore it.

"We need those materials now. We can't afford to wait."

In an email to Leys a federation member wrote: "In our considered opinion and based on market share for mesh of 45 percent and steel of 25 percent, if supplies cannot be manufactured and/or sourced ex-Auckland under level 4, then this will have an immediate impact on building in the residential commercial and infrastructure sectors."

Plumbing World's Robb Kidd said it was the industry that brought it to the government's attention.

"I don't think our ministers foresaw this as an issue. We need our ministers to understand that the building suppliers are reputable companies ... and the protocols and so on that we have in place are as robust as the Foodstuffs and the Countdowns of this world."

Kidd acknowledged the fact that many distribution hubs are in South Auckland, as is one flashpoint of the outbreak.

Officials aim to process exemption applications within 24 hours

Companies can apply for an exemption from travel restrictions, to distribute goods.

Fletcher Building Distribution chief executive Bruce McEwen told an industry webinar of several hundred suppliers yesterday that he had not heard of many exemptions being granted.

"We're monitoring all our suppliers across the supply chain," McEwen said.

"We're aware that a number have applied for exemptions from MBIE to operate. At this stage, not a lot of response is coming through."

This could be down to timing.

The ministry told RNZ exemptions would be decided on from today by the Director-General of Health.

It had a dedicated team aiming to turn around construction sector applications within 24 hours, it said.

Building Minister Poto Williams told RNZ that the level splits were different and "nor were we dealing with the Delta variant" last time Auckland was at level 3.

Feedback had come from members of the Construction Accord about the supply chain "and ministers will continue to explore options available", Williams added.

Leys said the Accord had little representation on it from the supply chain.

He was told by Williams yesterday that officials were figuring out where stocks were held, what was most critical, and she said "we will act if required to release product should that be necessary".

Even before level 4, in July, many builders had been anticipating a logjam.

A majority of 240 firms surveyed by Eboss were expecting products to cost quite a bit more and take quite a bit longer to get hold of in the coming six months. For instance, cladding products were expected to cost 26 percent more in six months, than they did six months ago.

The rules for construction sites opening up are at the Construction Health and Safety New Zealand website.

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