The Ministry of Business, Innovation and Employment will today spell out how some Auckland factories can restart under level 4.
Building sites are being mothballed due to a shortage of materials. (File photo). Photo: 123RF
It will select essential building product manufacturers to prevent a freeze on housing construction during a nationwide shortage of building materials.
Builder Dave van de Geest has six homes under construction in north Canterbury, and even before the Delta outbreak had taken to ordering cladding months in advance of breaking ground due to shipping delays.
"Now it's even worse. We have one job where it's a two storey place and we ordered the product up to four months ago and it looks like it's not going to get into the country now till maybe October which is a problem because you have a lot of expenses with scaffolding and keeping a project moving."
And now other materials made here, such as Pink Batts insulation, have run out.
"If you don't have insulation you can't put on your interior wall linings and so the project stops, so it is important. With, say, Pink Batts, everyone's looking for alternative products they can use," van de Geest said.
"If you imagine everyone runs over to another product and that runs out pretty quickly as well."
Williams Corporation is the fifth-biggest house builder in the country and managing director Matt Horncastle said he believed some small businesses would be pushed to the brink.
"Anyone who's in fixed-price contracts where it's build-only and anyone who are on labour-only contracts are going to be struggling. We saw this in Christchurch about five years ago as we came to the end of the Christchurch earthquake rebuild and we're seeing a lot of the same signs," he said.
"I've been doing this for 10 years and I've never seen price inflation and delays like what we're seeing in the current market" - Williams corporation managing director Matt Horncastle and Combined Building Supplies Co-op chair Carl Taylor
"The New Zealand construction industry's built on small businesses, a lot of them are labour-only and they just don't have the margin to deal with these delays and these lockdowns and these shortages.
Auckland is the manufacturing hub for many building materials but the assembly lines were forced to stop during the lockdown.
To address the shortage, the government will allow the four most critical products to be produced in the city - plasterboard, gypsum plaster, coated roofing steel and insulation.
MBIE said manufacturers will need a high degree of evidence to support their request to resume production.
"This may include evidence of how the building products are a critical component of residential construction, evidence of there being limited building product supply in New Zealand, and evidence of health and safety measures in place to minimise the risk of Covid-19 transmission."
It said the work would need to be undertaken with the minimum number of staff safely required and under alert level 4 rules, and it would release more information today.
Supplies co-operative for builders and tradies CBS Co-op has 600 members on its books across the country, and spokesperson Mike Blackburn said it was a relief to know manufacturing could resume for crucial materials.
"It's a great move. It's probably a little bit too late than what it should have been, but certainly it's a step in the right direction."
He said it could be weeks before building sites, mothballed from the shortages, could re-open.
"We've got builders all over the country who are simply out of certain building materials and their jobs have ground to a halt. I'm not sure exactly how long it's going to take some of these manufacturing facilities to ramp up."
The disruption is putting economic pressure on builders.
"Builders who rely on the cash flow for running their business are going to find it really tough for probably the next couple of months till they can really catch up again."
The Building Industry Federation, which represents firms in the supply chain, is working with MBIE to re-open factories and chief executive Julien Leys said there could be as many as 100 manufacturers up and running again by next week.
"It hopefully will mean that those materials start flowing back into the building and construction sector within the week and those people can be re-engaged to start building houses again."
But this will take time.
"In the case of insulation you've got to get a furnace started again and heated up before it can start manufacturing Pink Batts. Other manufacturing processes also take some time but then there's the fact that the distribution chain needs to then sort through those products there's been some congestion."
For builders, every day is crucial.
Van de Geest builds to a fixed price and said the rise in the cost of materials was affecting his bottom line.
"You build your margin and you go through and figure out there's so many dollars I should get out of this project to run my business and there's less, there's just less you know we're not going to lose but there will be people that will lose that have priced it far too tight."