NZ Building supply shortages

by | Sep 6, 2021

New Zealand building suppliers are already beginning to run out of stock as the effect of Auckland’s Level Four lockdown begins to bite in the rest of the country, according to a recent report.

Owned by Fletcher Building, Insulation supplier Tasman Insulation, told clients that its Christchurch warehouse was out of Pink Batts and it was unable to get any more from Auckland where the factory had been unable to operate.

“At this point we envisage we will not be able to supply our product anywhere in New Zealand or take orders until Auckland’s restrictions reduce to level three,” Tasman Insulation recently reported to its clients.

While the company had continued to try and seek government approval to resume manufacturing or distribution, “at this stage we have low confidence we will be able to achieve this” Tasman Insulation said in the report.

The situation meant there was only “extremely limited stock” in Auckland as well, according to a Fletcher Building spokesperson.

The Building Industry Federation (BIF) recently expressed alarm that the Government will not give building suppliers an exemption to transport goods out of Auckland. BIF claims around 90 per cent of building suppliers are imported or made in Auckland and that building sites around the rest of the country could run out in days, according to the report.

ITM, a co-operative of 96 hardware stores, also reported that it was having to tell customers it had limited supply of some products until Auckland emerged into Level Three.

ITM Chief Executive Darrin Hughes said while ITM stores were reasonably well stocked leading into the lockdown, those stocks will quickly be consumed if they cannot get replacement product out.

The choice facing the Government was simple, Mr Hughes said in the report.

“Either we allow Auckland based building materials manufacturers and importers to operate in a controlled and safe manner under Level Four to support construction in the rest of New Zealand, or we accept that our building sites will grind to a halt in the coming days,” he said.

It would cause “further financial hardship to builders and halting the provision of much needed housing, including the Government’s own Kainga Ora projects”.

Supplier of high-end hardware products, Invercargill’s Windsor Architectural Hardware, recently reported that it had cleared a big backload of orders after lockdown, but expected demand could ramp up again next week as its competitors in Auckland remained unavailable.

“Obviously builders under Level Three everywhere, bar Auckland, are back in business so they can source our products from various outlets around New Zealand,” Executive Sales Director Murray Brown said.

However, anyone in Auckland wanting to get hold of Windsor’s products required the appropriate documentation.

The biggest driver of shortages stemmed from the global difficulties importing goods into the country, Mr Brown said.

“The Government’s got to have a serious look at it. If most of your materials are coming from Auckland, in effect the rest of the country is stymied.”

The shipping problems had led to huge “hyperinflation” and Fox said he had never seen anything like in his 40 years of construction. “It’s virtually in freefall,” he said.

He said one supplier estimated the number of price increases had gone up 156 per cent on the same time last year.

It was difficult to tell whether the price increases were opportunism or necessity for suppliers, he said.

The only long-term result he could foresee was that consumers would have to accept projects were going to take longer and probably be more expensive.