The sector includes businesses that construct buildings and other structures; make additions, alterations or installations (including plumbing electrical, heating, ventilation and air-conditioning) to them; and maintain and repair them. It also includes those engaged in demolition and clearing of building sites as well as blasting, test drilling, landfill, levelling, earthmoving, excavating, land drainage and other land preparation.

In Christchurch the Construction sector is currently being driven by the effects of the Canterbury earthquakes. More than 8,000 dwellings have been deemed to be on land that should not be rebuilt on (Red Zone). There are other houses that will need to be replaced completely and many thousands more need repairing to various degrees. Over 1,200 buildings in the CBD will be removed completely, along with many other commercial buildings throughout the city. In addition, the city’s infrastructure has been subjected to significant damage, the repairs of which are now well underway. Demolition, repairs and new dwelling and commercial construction associated with earthquake damage will result in a period of heightened activity in this sector for a sustained period to replace the lost building stock.

The sector is supported by an elaborate supply chain of mainly domestic manufacturers supplying materials and components involved in construction. Demand in this sector is also linked to demand for professional services such as architects, quantity surveyors, project managers and engineers.

Christchurch Quick Facts

  • Contributes approximately $1919 million to Christchurch GDP (Infometrics’ Estimate year ended June 2014, $2010)
  • Accounts for around eleven percent of GDP in Christchurch
  • Around 5,310 business units are based in Christchurch (2014, Statistics New Zealand)
  • Has around 22,240 employees (2014, Statistics New Zealand)
Construction Sector Employment Breakdown, 2014
Source: Statistics New Zealand
Sub-sectorEmployee Count% of total
Building Construction703032%
Heavy and Civil Engineering Construction448020%
Construction Services1075048%
Total22,240

Sector Trends

Growth

With all of the work to be carried out over the next few years, the Construction industry is poised to grow rapidly. We have already witnessed a rise in employment and would expect this to continue for years to come. While this industry grows not only in terms of employees, we would also expect to see an increase in profits due to the increased workload and an imbalance in the supply and demand equation.

Changes to Construction Methods

Since the earthquakes there has been significant innovation in construction and repair methods in order to manage the unprecedented scale of the construction task in the city. For example: pre-fabricated components are being used in the residential sector in response to the long lead times for traditional on-site construction. Although prefabricated components have long been used in the commercial sector, the residential sector is now adopting the same, reducing build times to weeks rather than months.

Sustainability

Sustainable development principles are impacting urban design and planning practices and the materials used on individual projects. Although turning principles into regulation has been a slow process, councils provide information and advice on building sustainable homes and commercial/industrial buildings.

Sector Initiatives

Wave of Residential Subdivisions

Land re-zoned in the Greater Christchurch area during the last 18 months will provide sections for more than 20,000 households over the next five years. The majority of these will be in the south-west and Belfast areas; to the north in Waimakariri; and in Rolleston, Prebbleton and Lincoln as well as at Wigram.

Central City Rebuild

The Canterbury Earthquake Recovery Authority’s Central City Development Unit (CCDU) has prepared a Christchurch Central City Rebuild Plan. The plan envisages a more compact CBD involving 12-17 Anchor Projects and an estimated mixed retail office space of 300-400,000 m2.

Rebuild Project Management Offices

The Canterbury Construction sector has been transformed by the earthquakes of 2010-2011. The following aspects of the rebuild are being managed by a small group of large project management offices (PMOs).

Horizontal infrastructure:
The reinstatement of roads and services is an alliance between Christchurch City Council (CCC); Canterbury Earthquake Recovery Authority (CERA); New Zealand Transport Agency (NZTA); Fulton Hogan; Downer Construction; Fletcher Construction; McConnell Dowell New Zealand; and City Care. The alliance work is managed by the Stronger Christchurch Infrastructure Rebuild Team (SCIRT), which is responsible for design, planning and cost estimation, with the actual work undertaken by the delivery teams such as City Care, McConnell Dowell, Downer and Fulton Hogan.

Residential sector:
The Earthquake Commission (EQC) appointed Fletcher Construction to run a Project Management Office (PMO), known as EQR, to manage insurance claims of less than $100,000. The work itself is
carried out by more than 1100 accredited contractors, who are predominantly Canterbury-based.

Claims of more than $100,000:
Private insurers have adopted a similar approach of repair/rebuild work being managed by project management offices (PMOs), with the repair/rebuild work being undertaken by a pool of accredited
contractors — IAG appointing Hawkins; AMI appointing Arrow;, Vero appointing MWH Mainzeal; Lumleys appointing Ireland; and Tower appointing Stream.

Education sector:
The University of Canterbury (UC) has plans for a $1.2 billion campus development over six years to repair earthquake damage and integrate new building to deliver better facilities into the
future. The Ministry of Education (MinEdu) is also delivering a $1.1 billion renewal of property in Greater Christchurch to repair earthquake-damaged schools and deliver a modern schooling environment. These programmes are being co-ordinated by a single PMO to streamline procurement and maximise efficiency of programme delivery.

Other government building programmes:
Housing New Zealand (HNZ) is managing a significant repair and replacement programme for its social housing stock. Christchurch City Council has established an internal PMO for the repair of its smaller buildings, totaling around 1,600 commercial-type buildings and 2,800 social housing units. A number of other government agencies with relatively small property portfolios have repair and replacement programmes that in usual circumstances would be unprecedented (for example: the Fire Service is building seven new stations to meet the known and emerging needs of the city, at a cost of $50 million).

Roads of National Significance (RONS)

The Christchurch Roads of National Significance (RONS) projects will improve key sections of three state highway corridors that provide critical routes to Christchurch International Airport (SH1), into central Christchurch and to the Port of Lyttelton (SH74 and SH73).

Port of Lyttelton

Land at Lyttelton Port has been reclaimed using earthquake deconstruction waste. The long-term strategy is to shift port facilities to the east. Lyttelton Port Company (LPC) is also planning for the ability to accommodate larger ships.

Construction Sector Workforce Plan for Greater Christchurch

Building and Construction sector leaders with support from the Construction Strategy Group have played their part in working with the Canterbury Earthquake Recovery Authority (CERA) and the Ministry of Business, Innovation and Employment (MBIE) to develop the Construction Sector Workforce Plan for Greater Christchurch. Rebuilding Christchurch brings with it a range of challenges for industry and businesses as well as administrators in the public sector. This Plan as set out represents a collaborative effort to deal with some of those challenges.