Government and construction industry to build big, lift productivity with Transformation Plan

Delivering the workforce and productivity gains required to build the houses, schools, roads, rail and hospitals New Zealand needs will become easier with the Government-industry Construction Sector Transformation Plan launched today, Minister for Building and Construction Jenny Salesa says.

“The action plan launched today delivers on the Government’s Construction Sector Accord promise in April to develop a tangible plan that ensures industry has the right skills, the right people, and the right internal coordination to lift its productivity and take advantage of the quarter of a trillion dollars of public and private construction work expected over the next five years,” Jenny Salesa says.

The Construction Sector Transformation Plan will see Government and industry:

  • create a long-term workforce plan;
  • strengthen industry’s voice in training: to shape the Reform of Vocational Education (RoVE), and through the new Workforce Development Councils;
  • drive cooperation through information sharing and education programmes to improve culture and performance;
  • promote simpler, shorter contracts that don’t overburden subcontractors in their dealings with bigger companies;
  • develop a mental health strategy and expanding Mates in Construction to support better mental health in the trades;
  • run diversity campaigns to encourage women and young people into construction.

“This plan is a blueprint for sorting out the construction sector’s long-term challenges around risk, overly complex contracts, skills development and much more. It’s a very significant step in the right direction.”

“We’ll be working together with all the players to smooth out the boom and bust of the building cycle; address chronic skills shortages; reform New Zealand’s building consenting system; make procurement fairer; and improve mental health in the sector.”

“We’ve done things like publish a list of all the Government’s big jobs coming up over the next 10 years to signal clearly to industry that there is a bright future for them and their workers.”

“We know that the hands-off approach of the last government had been ineffective in meeting the needs of the building and construction sector for far too long. Labour productivity growth has been dire – averaging just 0.6 percent between 2011 and 2017, and that’s meant building in New Zealand has cost more than it should. By having a smarter, more coordinated construction industry we can grow construction activity and put downward pressure on the price of building things like houses.”

“This plan gears up the construction businesses to take advantage of the oncoming tide of construction activity expected in the next few years, especially given the Government is constructing so many state homes and rebuilding our schools and hospitals.”

“Based on the National Construction Pipeline Report 2019, national construction activity over the next five years is forecast to total $214.9 billion. This figure is set to rise following the Government’s announcement in December of an extra $12 billion in investment to tackle New Zealand’s infrastructure deficit over the next five years.”

“This plan will give building and construction businesses the confidence to train and hire more workers to meet the oncoming tide of construction work. No wonder our construction workforce and apprentice numbers have hit record highs.”

“The Construction Sector Accord got the industry and Government in the same room, and we developed this transformation plan together to tackle the industry’s longstanding challenges.”

“This plan with industry is just the latest proof that this Government is addressing the long-term challenges that have held New Zealand back. We’re tackling these challenges now so that we can build the homes, schools, hospitals, roads and rail New Zealand needs for the future.”

“This is the Government’s first Industry Transformation Plan being created to tackle New Zealand’s long-term challenges and lift the productivity of our vital sectors. We promised it: now we’re delivering it.” says Jenny Salesa.

More information:

The Construction Sector Transformation Plan:

  • The Transformation Plan is a three-year plan delivering action and change across six major areas: leadership; business performance; people development; health; safety and wellbeing (including mental health); regulatory environment; procurement and risk
  • The Plan is available here: https://www.constructionaccord.nz/transformation-plan/

The Construction Sector Accord

  • The Construction Sector Accord sets out to increase productivity, raise capability, increase resilience and restore confidence, pride and reputation, in the sector.
  • Launched in April 2019, the Accord committed Government and industry to delivering:
    • the Construction Skills Action Plan [delivered]
    • the Government’s new Construction Procurement Guidelines [delivered]
    • an Infrastructure Commission [delivered]
    • the Building System Legislative Reform Programme [Bill in first half of 2020]
    • the Construction Sector Transformation Plan [delivered today]
  • More on the Accord at: www.constructionaccord.nz

Industry Transformation Plans

  • This is the Government’s first Industry Transformation Plan.
  • Industry Transformation Plans are sector-led, government-supported initiatives to boost productivity in key industries and prepare their workforces for the future of work
  • Other Industry Transformation Plans are being rolled out to the digital technologies and agritech sectors.
  • More on the Plans at: https://www.mbie.govt.nz/business-and-employment/economic-development/industry-policy/

Sources:

  • 275,000 people were working in the building and construction sector in 2019 (MBIE: December 2019)
  • The construction workforce is expected to grow by 20% over 2020-2022 (MBIE: 2019)
  • Construction apprentices in trades training hit an all-time high in 2019 (27,788), up 4,715 since 2017 (20.44%) (TEC: January 2020)
  • Labour productivity figures from Productivity in the construction industry (BRANZ: 2017)