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Many spokespersons and news reports have portrayed the severe situation of New Zealand's shortage of building materials, and some commentators have chanted that local manufacturing of building materials should be increased.

As we all know, due to factors such as logistics delays and surge in demand, the supply of building materials in New Zealand was already in a hurry long before the city was closed.

Nowadays, Delta strikes. Although the level of blockade in other areas has dropped, Auckland, as the country’s main logistics hub and a major supply center for many materials, still maintains Level 4 alert. Because of this, some projects in other areas are still late. Can't start construction too late. So, how can New Zealand get rid of the shortage of building materials in the future?

Many spokespersons and news reports have portrayed the severe situation of New Zealand's shortage of building materials, and some commentators have chanted to increase local manufacturing of building materials.

Bruce Welsh, an architect in Wellington, believes that there is an unprecedented shortage of construction materials.

If you just chat with people in the industry, you will hear that wooden frames, plywood, engineered wooden beams, etc. have been out of stock. Cement will have to wait several weeks to arrive, and window joinery products may even have to wait several months.

Affected by shipping, container supply and transportation delays, imported materials will experience longer delays. Well-known manufacturers’ exterior wall panels have to wait about 18 weeks. If you are lucky, you may be able to receive them on time. Because they are not sure whether they can get the goods and the price of the goods, some major contractors have stopped quoting for work involving structural steel. Circuit components and white goods have to wait several months even if they are in stock.

Welsh said he was told that the price of some materials could fluctuate by 20% within a day.

Every day, people in the construction industry are experiencing material shortages, labor shortages, logistics delays, and various cost increases.

Some commentators called for increasing production in New Zealand to solve the dilemma of material shortages.

Shortage of materials and soaring transportation costs

In May of this year, ANZ Bank’s "NZ Property Focus" (NZ Property Focus) highlighted this issue. The report found that the construction industry is facing "huge pressure on production capacity," and the shortage of materials is one of the initiators. The report points out that finding the raw materials for building houses has become increasingly difficult and expensive. The epidemic has disrupted the international supply chain, caused the prices of raw materials such as wood to soar, and made project construction more costly and time-consuming.

According to the report, these problems have significantly increased construction costs, delayed the construction of new homes, and caused a shortage of 70,000 homes. There is no doubt that the construction cost of new homes has risen. The New Zealand Bureau of Statistics report pointed out:

The construction cost of new homes rose by 4.6% in June 2021, the largest increase since 1987.

At the same time, Julien Leyes, CEO of the New Zealand Building Industry Federation, mentioned that New Zealand is no longer a stop on the international shipping and construction supply route, and supply can only reach Australia. In early August, Leys informed the Supply Management news network that a New Zealand company had told him that it would spend $65,000 a week on logistics to ensure supply security.

"We have to find a way to make some materials ourselves to make up for the shortage," Leys said.

Craig Harrison, the national secretary of the Maritime Union of New Zealand, also told the Logistics Management news network that New Zealand needs to improve its shipping capabilities and reduce its dependence on foreign carriers. Harrison said the ongoing blockages and delays in New Zealand's supply chain mean that it is not known when this situation will take the lead. Trina Farr, Pacifecon's business manager, added that the demand from local construction companies is increasing. Some companies immediately place an order once they have won the project, even if the project does not start immediately. Some companies have completely reviewed their procurement and project management systems.

Julien Leys pointed out in the Stuff interview that the four factors that led to the decrease in supply and the increase in cost are:

To make up for the housing shortage, New Zealand is trying to build 40,000 new houses

Epidemic stimulus allowances have many people invest in renovations

Historical underinvestment in the infrastructure of the wood processing plant

Increasing overseas demand for New Zealand timber

Leys estimates that some construction projects may experience 8 months of delay.

As one of the most needed materials for building houses, the shortage of wood has gradually been reflected in various data. Statistics New Zealand data show that the export price of logs in the March quarter increased by 9.1%, and the price has set a record. In the first two months of 2021, the export volume of forest products increased by 27%.

In July of this year, Scott Fisher, the CEO of Prefab NZ, mentioned in an interview with Newsroom that the United States and China rushed to grab New Zealand timber and logs, coupled with logistics delays, which meant a double crit on the price of raw materials, causing New Zealand locals to be uncomfortable. Do not pay for raw materials at international prices.