Queenstown construction industries’ critical labour shortage

by | Sep 26, 2022

Queenstown Construction streetscape

The planned Lakeview Taumata residential, hospitality and retail precinct. Image source: https://www.monkmackenzie.com

Queenstown’s construction industry is currently stuck in a volatile labour market as staff leave New Zealand or move to other towns, with difficulties attracting new workers and the cost of construction materials increasing.

Naylor Love, a top-performing commercial construction company, is especially feeling the impact of the currently unpredictable market. Naylor Love Central Otago Director, Greg Boland says that the labour shortage is a nationwide problem that affects highly skilled positions in the construction industry as much as carpenters and labourers.

However, this shortage is particularly felt in Queenstown due to the high cost of living and the town being less enjoyable with closures and queues at restaurants and bars due to worker shortages in hospitality as well.

“People are going off to Whistler, they are going off to Auckland. They are going to Christchurch because they believe it is cheaper to live there,” Boland said to Stuff NZ.

Larger projects like the new $1.4 billion Dunedin Hospital and a $683 million stadium in Christchurch would also be attracting people, he said.

Increasing worker numbers by 10% would be simple enough, however, there is currently no one to fill the roles, Boland added. “The labour market is volatile at the moment,” he said.

Immigration NZ’s handling of applicants is also frustrating he said. One instance saw the company apply for two separate project manager positions based in Auckland with the same details and salary – one was accepted and the other was declined.

Backing up Boland’s comments is Naylor Love Chief Executive, Rick Herd, saying it is a struggle to get any workers, including professionals such as engineers, surveyors and project engineers.

Naylor Love Construction lost up to 12 good staff during COVID-19 due to the difficulties of getting their families into New Zealand. “The government needs to be not only opening the door but actively encouraging them. It is not only our industry,” he said.

The staff turnover for Naylor Love was lower than other companies as they endeavoured to look after their people as best they could during the pandemic. However, with 10 per cent less staff than they wanted, they must ensure they do not overcommit to projects.

“That means we turn work away and that in itself drives costs up,” Herd said. It also puts strain on existing staff working to deadlines if others quit halfway through a job when there is already a lack of workers, he added.

The construction company is currently working on a large project to upgrade the Skyline Terminal in Queenstown and an upgrade for Mt Aspiring College in nearby Wānaka and has signed up to work on the billion-dollar Lakeview, Taumata project on Queenstown’s former Lakeview camping ground.

The planned Lakeview Taumata residential, hospitality and retail precinct sits on a 10-hectare elevated terrace at the edge of Queenstown’s CBD and will incorporate open public spaces, 500 apartments and three hotels.

“The heavy part of the construction for that is two years away so we will make sure we have not taken on other jobs. We will probably have to bring in other people from other centres,” Mr Herd said about the Lakeview project.

Cook Brothers Construction said they were also looking for more staff. Business Development Manager, Simon Glass said, “It is a real mix of roles – project managers and quantity surveyors right through to builders – all trades.”

The labour shortages and increased costs of construction materials are felt in all sectors of the industry with little that can be done as jobs pile up.

Queenstown Lakes District Council Chief Executive, Mike Theelen said that the cost of housing in the district is one of its biggest challenges at the moment with approximately 700 households on the Queenstown Lakes Community Housing Trust’s waiting list.