How will the NZ Infrastructure Strategy impact the construction industry?

Talking to a packed room of representatives from large ACE organisations, Ross Copland shared an infrastructure vision for Aotearoa over the next 30 years. The challenges of rising costs, a shortage of workers, an inefficient consent system and global warming were well known realities to those in the room. However, the presentation was focussed on answers not issues and so it was with eager anticipation that I listened to the plan for building a better New Zealand.

The strategy, Rautaki Hanganga o Aotearoa – New Zealand Infrastructure Strategy 2022–2052 ?draws on research, consultation and the views of more than 20,000 New Zealanders. It aims to take a system wide approach to infrastructure; spreading costs fairly, getting the most out of what we have, and making informed decisions on maximising limited resources. It has been described as the first long-term infrastructure strategy for our country.

Built around five objectives, the infrastructure strategy includes buildings, transport, energy and water and considers how they work together. The objectives are:

1. Enabling a net-zero carbon emissions Aotearoa?
2. Supporting towns and regions to flourish
3. Building attractive and inclusive cities
4. Strengthening resilience to shocks and stresses?
5. Moving to a circular economy?

There are a number of challenges to meeting these objectives. Construction costs have risen 60% faster than prices elsewhere in our economy, there will be a shortfall of 118,500 construction workers in 2024, 115,000 more homes are needed to fix the housing crisis, the cost to fix our water networks is $90 billion, our population is growing and ageing, electricity generation needs to increase by 170% and there is a 75% chance of an alpine fault earthquake by 2070. No small task!

Trying to build our way out of these challenges would mean nearly doubling what we currently spend to around 9.6% of GDP over a 30-year period. Not only is this simply too expensive, we are unlikely to have the capacity to do it either. As Ross Copland said, we need to do things differently.?

As the CEO of an engineering consultancy, I have recognised that while we play a small part in the overall picture, our organisation has had to adapt to a changing world and do things differently. It was inspiring to hear the strategy that will potentially provide a roadmap enabling us all to approach infrastructure in new and innovative ways. There were a number of the presented solutions that struck a chord with me.?

Resilient buildings

Designing and building resilient structures is so important when considering our earthquake history, and our likely future. Sitting on the boundary of two active tectonic plates, our risk of natural disasters such as earthquakes, volcanic activity and tsunamis is significantly higher. At the same time, climate change is increasing the risk of storms, floods and the impact of rising sea levels. In addition to the natural environment, our infrastructure continues to rely more heavily on technology, making it more susceptible to cyber attacks. Building a future where our infrastructure is resilient in the face of a broad range of future events is vital.

Technology as a solution to the Productivity Issue

To meet the requirements of our future needs, we need a significantly more productive construction sector. Labour productivity is declining in our industry while other industries continue to make progress. In the face of increasing demand, worker shortages and increasing costs, a new approach is needed. Technology is key to addressing this. Currently, our sector uses less ICT than any other industry. In order to plan investments in training, technology and innovation, the strategy calls for more certainty in government infrastructure spending. Providing the confidence to our industry to enable organisations to stop, think, plan and implement better ways of doing things is very much needed.

Increasing Diversity

The strategy also identifies the need for a training and career development pipeline to help bring groups that are currently underrepresented into the construction sector. Increasing the diversity in our industry has a number of well documented benefits, including a better work culture, less competition and more collaboration. Greater diversity has been shown to improve recruitment, retention, innovation and group performance. Examples of social procurement have been successful in increasing previously under represented groups such as the Auckland City Rail Link’s cadetship programme for Māori and Pacific people, which provides on the job training.

Improving the efficiency of the consenting system

Issues around our consenting system were also highlighted. The time it takes to get consent has increased by 150% in 5 years and the cost has increased by 70% in the last 7 years. For me, the use of technology goes hand in hand with the streamlining of processes and offers huge potential in reducing the time and cost burdens faced by our industry.

The strategy document has been provided to the Minister for Infrastructure and it has been presented to the House of Representatives . The Government will provide its response in September along with a path for its implementation.

The 238 page document is detailed but well worth a look. I will continue to comment on various aspects of the strategy, so follow me on LinkedIn if you’re interested in the details and my interpretation of what this could mean for our industry.