The Effect Of COVID-19 On New Zealand’s Construction Industry

As New Zealand comes out of the back end of a tumultuous 2020, most Kiwis are starting to get their bearings and are finally getting a chance to reflect on the previous year. There’s no doubt that 2020 was a year for the history books and it’s ripples will continue to make their way through the forthcoming years. As a country we may have gotten off lightly in retrospect having returned to normality well before the rest of the world. However, the effects of a global pandemic can still be felt through many of our local industries. Whether it was due to financial hardship caused by lockdowns and shut downs, the uncertainty the current future holds, or just by the new processes that are required to shield New Zealand from COVID-19, 2020 has been a year that's required adaptation on multiple levels.

The construction industry, and therefore the scaffolding industry, is no no exception. The effects on the economy has been a double edged sword, having both positive and negative effects overall. South Pacific Scaffolding Ltd has always treated safety as one of the pillars of their business. With a reputation for safe and hazard free worksites, protecting personnel from COVID-19 was a natural extension to their already air-tight safety protocols. Level 3 & 4 lockdowns allowed them to carry on working, but with measures in place to keep their workers safe. This meant that South Pacific Scaffolding Ltd implemented procedures to split teams into “bubbles”, with multiple teams only interacting directly with personnel in their bubble. The nature of doing this had an impact on efficiency and slowed progress down slightly, but they understood this was a small sacrifice in doing their part in keeping the spread of the virus at bay.

This extended to coordinating with other contractors to ensure that they were all doing their part in keeping the New Zealand construction industry afloat through this turbulent situation. While adopting these new social distancing measures may have caused some initial slowdown, they are proud to look back now and see how effective they were in protecting their industry. When compared to the effects on the global construction industry, New Zealand deserves to give itself a pat on the back for everyone banding together and making it work. Global construction activity is down significantly in Q2, with 25% of global projects halting in 2020’s second quarter. Globally productivity is set to fall 12%... but what about in New Zealand? Thankfully Kiwis in the construction industry are only looking at a fall of 5%, a huge decrease from the rest of the world.

Jarrod Radcliff, director of South Pacific Scaffolding thinks there is a reason for this “As a country, New Zealand has a neighbourly culture. Kiwi’s know how to come together, make sacrifices and work as a team. No one is afraid to roll up their sleeves and get stuck in. We’ve seen this in numerous instances since we’ve been navigating COVID-19, and this same mentality has been present in the construction industry”.

Even though the nation has avoided the main impact of COVID-19 when compared to the rest of the world, there have still been negative effects on most companies' profit margins. The caveat of New Zealand’s quick response to the situation by imposing nationwide lockdowns has meant that businesses need to include the possibility of shutdowns into their costs. This means that in order to protect themselves, many businesses in the construction sector have had to adjust their costs to accommodate their businesses potentially having to cease for a period of time in the event of an outbreak of the virus. These new inbuilt costs have come at a time that has seen banks respond to the epidemic by providing the lowest interest rates New Zealanders have seen in years. This increase in available money in the pockets of New Zealanders (coupled with expenses such as international travel being off the table) has resulted in people investing into their properties.

“There are still many projects across Auckland, but the flip side of this is there are also more scaffolding companies after the same piece of the pie. We’ve seen a huge increase in estimators being active” says Radcliff. So while costs have increased to accommodate the needs of COVID-19, the highly competitive market means that the overall amount companies can charge has had to stay relatively the same. Instead, these accommodations have slimmed down profit margins in order for companies to remain competitive. Overall costs have gone up, but margins have decreased.

South Pacific Scaffolding has taken the turbulence in stride, not letting the pandemic derail it’s future plans. Even with all the uncertainty faced by them, in June of 2020 South Pacific Scaffolding Ltd started a company wide initiative to be carbon zero by the end of the year. Applying for Toitu Envirocare’s esteemed carbon zero certification involves having your company's carbon footprint measured. Once this has been established, it is up to the company to employ means to offset this footprint to zero. South Pacific Scaffolding invested in a range of initiatives to make strides towards a sustainable carbon zero footprint, such as clean energy from solar and wind power. Even with all the other adaptations needed to run a construction business in 2020, as of 23rd December 2020, South Pscific Scaffolding was certified by Toitu Envirocare as cabron zero.

“While COVID-19 has taken center stage in everyone's mind as the current biggest threat to the world, climate change didn’t just take a break. It is still an issue that needs to be addressed and we believe it to be our responsibility as a company to do our part to help curb it. New Zealand has shown its ability to combat the effects of COVID-19, so it only seems fair that we do everything we can to keep our beautiful country environmentally healthy in return”. Says Radcliff.

While no one can be certain what 2021 will bring, South Pacific Scaffolding Ltd is pushing towards a brighter future. The global pandemic of COVID-19 is sure to have some rippling effects over the upcoming months, and only time will reveal its entire impact on New Zealand’s construction sector.

“We’re staying on our toes and are ready for the future,” says Radcliff. To find out more about South Pacific Scaffolding Ltd services, as well as news about their latest initiatives for a carbon zero company, head over to their website https://southpacificscaffolding.co.nz

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