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Spotlight on: Temporary Traffic Management (TTM)
With road cones and roadworks often taking centre stage in political and public discussion, the Temporary Traffic Management Industry Steering Group (TTM-ISG) wants to shed light on the work underway to change the way temporary traffic management is implemented.
Set up in 2023, the core purpose of the TTM-ISG is to support the industry’s transition, in the way traffic management is planned and delivered, to a more riskbased approach, away from the previously prescribed guidance.
Late last year, the NZ Transport Agency Waka Kotahi (NZTA) adopted the New Zealand guide to temporary traffic management (NZGTTM), superseding the over 20-years-old Code of practice for temporary traffic management (CoPTTM).
“We used to rely on following prescriptive practices, which meant that sometimes the controls in place didn’t match the risk of the work activity or environment,” says TTMISG Chair, Darren Wu. “And sometimes this could lead to too many road cones, given the rules we had to follow.”
Why is this change taking place?
“Moving away from prescribed practices provides the flexibility for appropriately sized temporary traffic management to be applied to specific activities. This can enable a reduction in costs for some worksites, without impacting safety, due to control types and equipment being more suitably sized for the site and risks,” says Darren Wu.
Ultimately, the changes support businesses to better align with the Health & Safety Work Act 2015, which states that ‘risks that arise from work must be eliminated so far as is reasonably practicable’ and, if not,
that they ‘must be minimised so far as is reasonably practicable’.
“This change in the way the sector manages risk may not be directly visible to the public in all cases but will open doors for a range of potential tangible benefits like avoiding impact during peak commuter traffic, cost savings, due to more work being done in the same closure and rethinking how we can more effectively keep road users and road workers safe,” says Darren Wu.
What does this change mean for businesses?
The move to this more risk-based approach means businesses need to undertake and demonstrate risk management planning before deciding on ‘what’ controls need to be put in place. Whether you are a small user of TTM or it’s a core part of your business, Darren Wu says that "CoPTTM in the past may have led us directly to a TTM solution, but going forward we will benefit from first looking at the specific risks for your work activity and then using this to inform the TTM requirements to keep people safe.”
In addition to the way in which we plan, design and implement TTM requirements, there are also some changes with the training system for TTM roles. NZTA’s warrant system, which covered training and warrants issued for roles like the Site Traffic Management Supervisor (STMS), are in the process of being retired. The TTM–ISG have been working with the sector to develop a new Credentials Framework that offers a new pathway for businesses to use for their people’s training and development of competency for the TTM roles that they carry out. Recording the competencies people have for any TTM role will be something that healthy businesses can demonstrate to clients as part of robust assurance frameworks.
It’s all about keeping people safe
“We want to remind people that TTM is in place to keep both road workers and
road users (drivers, their families, walkers, cyclists) travelling though road work sites safe, and disrespecting or ignoring safety controls can be catastrophic,” says Darren Wu.
Between 2019 and 2023, 356 people were killed (42 fatalities) or seriously harmed (314) at road work sites, most of whom were road users.
“The way people respond to controls in place is a crucial factor in how safe these sites are for everyone. Respecting the controls in place not only keeps people safe but can make for a smoother, less disrupted journey.”
“It’s really important we do not lose sight of the reason why we have temporary traffic management in the first place – to keep everyone safe. That’s why it’s so disappointing when we see negative commentary play out.
“When this type of narrative gains traction, we see safety controls being ignored as well as an increase in abuse towards road workers from the public, including physical abuse such as threatening workers with firearms or weapons, or driving dangerously through work sites.
“We encourage people to see the face behind the cone, or stop / go paddle, and treat road workers with respect,” says Darren Wu.
To help better understand how widespread the problem road worker abuse is, the TTM-ISG has partnered with the Traffic Management Association of Australia (TMAA) to include New Zealand in the 2025 TMAA Road Worker Safety Survey. Results are expected in the upcoming months.
Where can you get help?
If you want to more about the changes underway, visit the TTM-ISG website and sign up to the newsletter – www.ttm-isg.org
10 A bright idea for Canterbury
The Lauriston Solar Farm, the nation’s largest solar energy project to date
14 Consents data indicates internal migration
Otago region experiences highest number of yearly home consents ever
18 Christchurch Airport unveils nation’s first electric fire truck
The airport transitions to a zero-emissions fleet by 2035
22 The pressing need for clearer pathways to apprenticeships
Calls for urgent vocational education reforms emerge
26 Government unveils greenfield development support Striking balance between agricultural preservation and housing growth
36 Can infrastructure pay for itself? Commission explores future funding possibilities
40 Swearing on site Venting, bonding, or bullying?
44 BYD Shark 6 The hybrid ute causing a commotion
50 The future of engineering
UC’s Dr Brian Guo says it’s digital, resilient, and sustainable
This issue of Elevate opens up by looking at the Lauriston Solar Farm, New Zealand’s largest solar energy project to date, which marks a significant milestone in the country’s renewable energy journey.
We speak with Dr Brian Guo from the Department of Civil and Natural Resources Engineering at the University of Canterbury, who discusses the three key factors that will shape the future of engineering.
In a bid to address New Zealand’s ongoing housing crisis, the Government has announced a series of measures aimed at accelerating home construction on the outskirts of cities. We also examine whether public infrastructure investments can generate enough revenue to cover their own costs, among other key issues
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A bright idea for Canterbury
The Lauriston Solar Farm, New Zealand’s largest solar energy project to date, marks a significant milestone in the country’s renewable energy journey.
Situated in the Canterbury region, this 63-megawatt solar farm marks a growing shift toward sustainable energy solutions in Aotearoa. But while the farm’s progress signals a bright future for solar power, its development hasn’t been without challenges. Most recently, the issue of accumulating green waste has emerged.
Genesis Energy first announced the Lauriston Solar Farm project in early 2023, with construction officially beginning in early 2024. The project, undertaken in partnership with FRV Australia, is expected to generate enough electricity to power around 13,500 homes
The project’s rapid construction has been impressive, with thousands of solar panels installed across the expansive farmland. The goal has always been to provide a cleaner, more sustainable energy source for New Zealand while reducing dependence on fossil fuels. Genesis Energy has been vocal about its commitment to increasing the share of renewables in its energy mix, and Lauriston is a big step in that direction.
annually. Located in Mid Canterbury, the region was selected for its high solar potential, thanks to the abundance of sunlight and flat terrain.
The project’s rapid construction has been impressive, with thousands of solar panels installed across the expansive farmland. The goal has always been to provide a cleaner, more sustainable energy source for New Zealand while reducing dependence on fossil fuels.
Genesis Energy has been vocal about its commitment
to increasing the share of renewables in its energy mix, and Lauriston is a big step in that direction. The farm is also a crucial part of Genesis’s broader Futuregen strategy, which aims to replace thermal generation with 2,650 GWh of new renewable energy.
Despite this progress, the farm’s development has raised some unexpected challenges. One of the most pressing has been the accumulation of green waste during the construction phase. The
land, formerly used for agriculture, has produced a significant amount of organic debris, primarily grass and vegetation, cleared to make way for the solar panels. With limited options for disposal, large piles of decomposing green waste have built up on-site, drawing concerns from the local community.
The issue has sparked discussions around waste management in renewable energy projects. While solar farms are generally seen as environmentally friendly, the process of transitioning land use can create logistical headaches. Green waste decomposition can lead to methane emissions, an irony not lost on those advocating for cleaner energy solutions. Methane is a potent greenhouse gas, and its release could counteract some of the farm’s environmental benefits if not managed properly.
Genesis Energy has acknowledged the problem and is working on solutions to mitigate the impact.
The farm is also part of a larger trend of solar expansion across New Zealand. As technology improves and costs come down, more large-scale solar farms are expected to emerge. Options being considered include composting the waste, repurposing it for agricultural use, or finding ways to integrate it back into the ecosystem in a responsible manner. Given the farm’s location in a rich agricultural region, there may be opportunities to collaborate with local farmers or composting facilities to find a sustainable solution.
Beyond the waste issue, the Lauriston Solar Farm represents a significant move in New Zealand’s approach to energy production. The country has long been known for its reliance on hydroelectric power, but as demand grows and climate change affects water availability, diversifying the renewable energy mix has become a priority. Solar energy, while still a
relatively small player in the national grid, is gaining momentum, and Lauriston is setting a precedent for future projects.
The farm is also part of a larger trend of solar expansion across New Zealand. As technology improves and costs come down, more large-scale solar farms are expected to emerge.
For local communities, the Lauriston Solar Farm is both a point of interest and, in some cases, contention. While many support the push for renewables, concerns about land use,
environmental impact, and project management remain. Genesis Energy has taken steps to engage with the community, addressing questions about how the farm will operate and what benefits it will bring. One key advantage is job creation, both during the construction phase and in ongoing maintenance and operations. Additionally, as renewable energy infrastructure expands, there’s potential for lower electricity costs in the long term.
As the farm nears completion, all eyes are on its official launch and operational performance. If
successful, Lauriston could serve as a model for future solar developments in New Zealand, proving that largescale solar projects are not only viable but essential for a sustainable energy future. However, the project also highlights the need for careful planning and environmental management, particularly in addressing unforeseen consequences like green waste.
Ultimately, the Lauriston Solar Farm is a glimpse into New Zealand’s energy future, one that is cleaner, greener, and increasingly powered by the sun. With the right strategies in place to handle challenges like waste management, it has the potential to be a guideline for renewable projects in the years to come.
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Consents data indicates internal migration
By Ben O’Connell
There were 34,062 new homes consented in Aotearoa New Zealand in the year ended March 2025, down 3.3% compared with the year ended March 2024, according to new figures released by Stats NZ.
In the year ended March 2025, the North Island recorded 23,570 new home consents, a decrease of 7.1% compared with the year ended March 2024. Yet the South Island saw a 6.4% increase over the same period, reaching 10,491 new homes consented.
Economic indicators spokesperson Michelle Feyen said the increase in the South Island was driven by higher numbers of new homes consented in Otago, Tasman, and Canterbury compared with the same period last year. Take Queenstown as a prime example, a booming southern town now home to some of New Zealand’s richest.
“In the 12 months to March 2025, 2,556 new homes were consented in Otago – the highest number ever recorded for the region.”
Internal migration plays a quieter but still meaningful role in reshaping our housing landscape. Affordability, lifestyle, and remote working opportunities continue to lure North Islanders south; Kiwis in general are moving from larger, more expensive urban areas to quieter, more affordable towns.
Domestic outflows can put pressure on regional infrastructure, schools, and healthcare systems not originally designed to support
rapid growth. Yet commercial and residential construction remains in decline.
In February, Michelle Feyen remarked that the annual number of new homes consented has been plateauing for nine months. Residential property values echo this standstill.
“Residential property values continue to bubble up and down slightly from month to month but have been kept virtually motionless as a whole throughout the first quarter of 2025,” QV operations manager James Wilson said on the release of the latest House Price Index.
“Although interest rates have reduced markedly, buyers
In the year ended March 2025, the North Island recorded 23,570 new home consents, a decrease of 7.1% compared with the year nded March 2024. Yet the South Island saw a 6.4% increase over the same period, reaching 10,491 new homes consented.
are still finding the current economic climate to be a challenge. Job worries and a rise in unemployment are causing many to be cautious and play it safe right now, which is understandable. This is one factor that has helped to keep the brakes on throughout the first quarter of 2025 – a sizeable surplus of properties for sale is another.
“It seems sellers are out in force across Aotearoa today. You don’t have to walk very far around the neighbourhood these days to see a ‘for sale’ sign. Ample properties for sale and a lack of meaningful competition are helping keep prices really flat for now. That’s no bad thing, as firsthome buyers continue to make up a larger share of the market overall.”
“When the economy does eventually recover and all the excess stock that is available for sale on the market today is sold, that’s when we will see some more sustained home value growth. It could be a while yet.”
Christchurch Airport unveils nation’s first electric fire truck
By Leenah-Leen Arandia
Christchurch Airport has made a notable advancement in its dedication to operational excellence and sustainability by acquiring New Zealand’s first electric fire truck.
The Rosenbauer RT (Revolutionary Technology) model is fully electric and includes a small backup range extender generator designed to recharge the batteries when needed during extended emergency scenarios. The vehicle will serve as the airport’s primary response unit, replacing the current diesel truck.
“Safety is at the heart of everything we do, and this new truck ensures our emergency response teams have cuttingedge equipment to keep the airport community safe,” Christchurch Airport chief executive Justin Watson said.
“This is another step towards our zero-emissions goal. Innovation and responsibility go hand in hand. By investing in world-class emergency response technology, we’re ensuring our airport remains at the forefront of both safety and environmental leadership,” he added.
Christchurch Airport fire chief, Peter Moore, described the new truck as a “game changer” and said it will remarkably improve emergency response capabilities.
“It’s fast, highly manoeuvrable, and packed with innovative technology that makes our response times even more effective. Our teams have undertaken intensive training with Rosenbauer experts from Austria, and the feedback has been overwhelmingly positive. This is the future of airport firefighting, and we’re proud
to be leading the charge,” Moore stated.
Senior Firefighter Trevor Casey, who participated in the training for the new RT fire truck, expressed that operating the vehicle has been an “amazing experience.”
“Getting behind the wheel of this truck has been an amazing experience. It’s incredibly smooth, responsive, and packed with smart features that help us do our jobs better. The training has been excellent; it’s going to take our response times and capability to the next level.”.
Meanwhile, for Christchurch Airport’s Sustainability Transition Leader, Claire Waghorn, the acquisition of the new truck is “a bold step toward decarbonising airport operations” and perfectly aligns with the airport’s longterm sustainability objectives.
Christchurch Airport is actively transitioning its emergency response vehicles as part of its commitment to achieving a zero-emission fleet by 2035. The airport is also partnering with the same manufacturer to get a second, larger e-Panther electric fire truck, which is set to arrive in 2026.
This is another step towards our zeroemissions goal. Innovation and responsibility go hand in hand.
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The pressing need for clearer pathways to apprenticeships
By
New Zealand’s apprenticeship system is falling short in providing clear pathways for young people entering the workforce.
Only 6% of school leavers pursue apprenticeships, while nearly twice as many—11% of 16- to 19-yearolds—are not engaged in employment, education, or training. A new report from The New Zealand Initiative, Trade Routes: Charting New Pathways from Secondary School to Industry Training, highlights systemic weaknesses and calls for urgent reforms.
The report reveals that vocational education in New Zealand is fragmented, with no structured pathway equivalent to university preparation. “Schools are primarily geared toward university-track education, even though only about onethird of school leavers enrol in degree programmes,” says Dr. Michael Johnston,
the report’s author. He argues that New Zealand’s system fails to integrate apprenticeships into mainstream education, leaving many young people without a clear direction.
Johnston points to Germany’s ‘dual training’ apprenticeship system, which, in contrast, sees nearly half of all school leavers enter workplace-based training. Approximately 93% of those trainees graduate, and threequarters are immediately employed by the companies where they trained. Ultimately, New Zealand’s weak apprenticeship uptake, combined with a high number of young people disengaged from education and work, is indicative of a significant waste of human potential.
The cultural and structural barriers
One of the biggest challenges to apprenticeship growth in New Zealand is a deep-seated cultural bias toward university education.
University degrees are widely regarded as the superior pathway, a perception reinforced by parents, teachers, and schools. The secondary school curriculum is designed primarily to prepare students for university, offering little structured support for those interested in vocational training.
Johnston argues that this bias is further embedded by the qualifications system.
“The University Entrance qualification illuminates the way to university, but there is no qualification to do the same for trades,” he notes. The report suggests that an equivalent qualification, such as a Certificate of Trades Preparation, could help place vocational training on equal footing with university education.
Another challenge is the lack of coordination between secondary education and industry training. While initiatives such as Trades Academies and the Gateway program provide opportunities for students
to gain industry experience, they function as fragmented “add-ons” rather than forming a cohesive pathway. The Trade Routes report suggests that these initiatives should be unified under a single, structured vocational education pathway. Fixing the system
The Trade Routes report outlines several key reforms that could improve apprenticeship pathways in New Zealand. Among them is a recommendation to restructure Workforce Development Councils, which currently oversee standard-setting for industry training. The report suggests that Workforce Development Councils should be reconstituted with members elected by industry bodies rather than appointed by government ministers. This would increase their accountability and ensure that vocational education aligns with employer needs.
Another recommendation is to establish cooperative arrangements between secondary schools, allowing them to specialise
Ben Kennedy
in different educational pathways. This would mean that some schools could focus on university preparation while others develop strong vocational training programs. Johnston believes this approach could help normalise apprenticeships as a mainstream option rather than a fallback for students who struggle academically.
BusinessNZ has also voiced support for greater investment in apprenticeship training. Chief Executive Phil O’Reilly has praised the government’s efforts to boost funding and incentives for apprenticeships. However, he warns that “higher educational content will need to complement – not replace – practical elements of the training.” Employers, he argues, need a system that produces wellprepared apprentices with hands-on experience.
Policy changes target apprenticeship completion
The Government has introduced two major policy changes for 2025 that could impact apprenticeship retention and completion rates.
First, changes to the Fees Free program will shift funding from the first year of study to the final year of training. Under the new system, apprentices who have not previously used Fees Free funding may have their last year of study covered, with fees reimbursed up to $12,000 upon completion. This adjustment is aimed at reducing dropout rates and ensuring more apprentices reach their qualifications.
Second, the Apprenticeship
Germany’s dual training apprenticeship system is frequently cited as a model of success, with half of all school leavers entering workplace-based training.
The program combines structured classroom learning with paid, on-the-job training, ensuring that apprentices develop industry-specific skills while gaining practical experience.
Boost program will be refocused on first-year apprentices in high-demand sectors. From January 2025, employer subsidies will only be available for apprentices in industries deemed crucial to New Zealand’s economic growth, including construction, engineering, agriculture, and food production. While some see this targeted funding as a positive step, critics warn that it could leave other industries struggling to attract apprentices.
Could New
Zealand adopt the German model?
Germany’s dual training apprenticeship system is frequently cited as a model of success, with half of all school leavers entering workplace-based training. The program combines structured classroom learning with paid, onthe-job training, ensuring that apprentices develop industry-specific skills while gaining practical experience. Johnston acknowledges that fully replicating Germany’s system in New Zealand is neither politically nor culturally realistic. However, he believes key elements— such as closer industryschool collaboration, a clear apprenticeship qualification, and stronger
financial support—could be successfully adapted to the New Zealand context. One potential model for reform comes from Australia’s ‘Busy Schools’ initiative, which helps students transition into the workforce. Busy Schools provides workreadiness education, part-time internships, and structured pathways into apprenticeships. Johnston suggests that a similar approach in New Zealand, possibly through the 2025 charter school initiative, could provide clearer routes into vocational training.
while they learn, gaining work experience without taking on student loans. This makes apprenticeships particularly attractive for hands-on learners and those who struggle in traditional academic settings.
A stronger apprenticeship system would also improve industry engagement in education. Employers directly involved in training programs can ensure that graduates possess the skills needed in the workforce. This reduces the mismatch between education and industry needs, leading to better employment outcomes.
The path forward
Economic and social
benefits
Expanding and strengthening apprenticeships would not only benefit young people but also address pressing economic challenges. New Zealand faces ongoing skills shortages in key industries such as construction, manufacturing, and agriculture. A more robust apprenticeship system would help fill these gaps while reducing youth unemployment.
Furthermore, apprenticeships offer young people a financially viable alternative to university study. Unlike university students, who often accumulate significant debt, apprentices can earn
Addressing New Zealand’s apprenticeship gap will require coordinated action from government, schools, and industry leaders. Education policy must shift to place apprenticeships on an equal footing with university education. Schools must promote vocational pathways as a respected and viable option for students. Employers must be given incentives to take on apprentices and invest in training programs.
Johnston believes that systemic reform is necessary to change the perception of apprenticeships. “If clearer pathways from school to industry training were established as a serious option for all students, esteem for industry training would gradually improve,” he argues.
With recent policy changes and growing pressure for reform, the opportunity to reshape New Zealand’s apprenticeship system is now.
Government unveils major housing boost with greenfield development support
In a bid to address New Zealand’s ongoing housing crisis, the Government has announced a series of measures aimed at accelerating home construction on the outskirts of cities.
The plan includes allocating $100 million in loans for housing infrastructure and cutting red tape under the Resource Management Act (RMA) to free up land for development.
Housing and Infrastructure
Minister Chris Bishop said the Government remained committed to enabling cities to grow both vertically and outwardly.
He emphasised the importance of medium-sized greenfield developments in increasing the housing supply, noting that many such projects were at risk of delays or cancellation without the right financial support. Bishop explained that while the broader Going for Housing Growth initiative and RMA reforms were central to the Government’s longterm housing strategy, these would take time to legislate and implement. In the interim,
he stated, the new measures were necessary to boost housing availability quickly.
A key component of the announcement is the introduction of what the Government is calling the “Greenfield Model,” administered through the National Infrastructure Funding and Financing Agency (NIFFCo). Bishop outlined that NIFFCo had already been developing a pipeline of greenfield projects, and the first transactions would be drawn from this list.
Under the Greenfield Model, NIFFCo will lend money at competitive interest rates to a Special Purpose Vehicle established under the Infrastructure Funding and Finance Act during the development phase of housing projects. This debt will later be refinanced through private markets once developments are complete. Ultimately, future homeowners will repay the funding through an annual levy.
Bishop pointed out that the development phase is typically the riskiest part of a project, and private lenders usually charge higher interest rates to reflect this. By offering lowercost financing during this
Housing and Infrastructure Minister Chris Bishop said the Government remained committed to enabling cities to grow both vertically and outwardly.
period, NIFFCo aims to make it more feasible for developers to bring projects to market.
He added that the support would bridge financing gaps and help ensure that homes are built in high-need areas. The funding for this initiative will come from unallocated resources within NIFFCo and is designed to be recyclable, with capital returning to the fund after each five- to sevenyear development cycle.
In addition to the financing support, Bishop also announced Cabinet’s decision to remove LUC-3 protections from the National Policy Statement on Highly Productive Land (NPS-HPL) this year. He said this change would fulfill a National Party election promise and acknowledged the challenge of balancing land conservation with the urgent need for housing.
He explained that while the NPS-HPL is intended to protect New Zealand’s productive soils and food supply, it currently covers about 15 percent of the
country’s landmass. Of the three soil classifications it protects, LUC-3 represents the lowest quality but accounts for two-thirds of the protected area. Removing LUC-3 protections could open up land for development roughly equivalent in size to the Waikato region.
To maintain a balance between agricultural preservation and housing development, Bishop said the Government would consult on the establishment of “special agriculture zones.” These zones would focus on protecting LUC 1, 2, and 3 land in key horticultural areas like Horowhenua and Pukekohe, especially where these lands are grouped together naturally.
He concluded by describing the announced measures as short-term, cost-effective interventions designed to jumpstart urgently needed housing projects while broader system reforms are put in place.
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Safe Disposal of Household Batteries: Protecting People and the Environment
Household batteries of any kind deteriorate if not in use, and need to be disposed of safely once they are flat or show signs of deterioration: but they are hazardous, rechargeable batteries especially so.
If batteries or items that contain batteries (toys, cell phones, vapes, etc.) end up in wheelie bins, collection truck or a rubbish pit, they have the potential to harm people and the environment, cause fires in collection trucks or at facilities.
Safe Disposal and Recycling of Batteries: Drop-Off Locations and Guidelines
Damaged, leaking or rusty batteries can be dropped off for free at the hazardous waste drop-off area in Council’s Southbrook Resource Recovery Park and Oxford Transfer Station. These will be removed and safely disposed of along with the other household hazardous wastes that we accept.
Undamaged household and powertool batteries can be recycled, saving valuable components for reuse
and reducing the risk to people and the environment. These can also be dropped off for free at the Southbrook Resource Recovery Park and Oxford Transfer Station in our district. In Christchurch, household batteries can be dropped off for recycling at Bunnings Tower Junction, Bunnings Shirley, EcoDrop Parkhouse Road, EcoDrop Styx Mill, EcoDrop Metro, and Mitre 10 Papanui,. www.waimakariri.govt.nz
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3 NiMH We also accept removable mobile phone batteries, electric tooth brushes, disposable and rechargeable vapes – ask the staff in the ReSale Store where these should be dropped off.
Contact us m 0800 965 468 k office@wmk.govt.nz
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www.waimakariri.govt.nz
If your old phone doesn’t have a removable battery, drop the phone off at a Vodafone, Spark or 2Degrees retailer and it will be recycled through Re:mobile scheme. The Council will also accept mobile phones at Southbrook Resource Recovery Park, Kaiapoi Library, Oxford Library and
Rangiora Library - again speak to staff about how to recycle your old mobile phone through the Re:mobile scheme.
Lead-acid and Gel car batteries can be dropped off at the Southbrook Resource Recovery Park and Oxford Transfer Station recycling area in the signposted area. Please ask staff if you’re unsure.
Phoenix Metalman collects the undamaged batteries from our sites. While there are no viable options for recycling batteries in New Zealand, Phoenix sort the batteries and prepare them for shipping overseas, where the separated components of the batteries are given a new life in a variety of industries.
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Embracing change
Adopting new tech the key to construction’s future
Workplace injuries, labour costs, and a shortage of skilled workers are among the challenges facing the construction sector.
These issues can be addressed by adopting technology, according to the CEO of a leading safety and worksite management platform.
Ben Leach, founder and CEO of HammerTech, has witnessed first-hand how technology can boost productivity and help mitigate many of the rising costs and obstacles facing the industry.
“In our experience across New Zealand, Australia, and the US, some companies and subcontractors hesitate to embrace new processes, particularly when it involves technology. Many resist adopting new platforms, especially if they aren’t user-friendly,” he says.
Ben emphasises that embracing technology is essential for attracting new talent to the construction sector and ensuring future growth. Unfortunately, the construction industry has lagged behind other industries that are moving more swiftly to innovate.
“There are significant opportunities for New Zealand companies in the construction industry that become early adopters of evolving
In our experience across New Zealand, Australia, and the US, some companies and subcontractors hesitate to embrace new processes, particularly when it involves technology. Many resist adopting new platforms, especially if they aren’t user-friendly?
technology. These companies can boost productivity, deliver higher quality work, and enhance the safety of work sites for their teams.”
He also highlights the role of technology in reducing workplace injuries, a growing concern in the industry.
“The right construction-specific technology has proven to bring substantial benefits, not just for main contractors but for subcontractors as well.”
Injury prevention
“Access to accurate safety data allows a company to pinpoint which injuries are happening and implement measures to reduce their occurrence,”
Ben says. “For example, tracking hand injuries can help raise awareness, update safety protocols, and minimise the risk of these injuries moving forward.
Barriers to change
Ben illustrates several obstacles hindering technology adoption in the construction industry, including reluctance from tradespeople and subcontractors to embrace new technology, as well as budget constraints preventing companies from investing in tech solutions.
He stresses that while other industries are quickly adopting new technologies, construction must do the same to stay competitive.
“AI tools like ChatGPT are disruptive and can be perceived as a threat to industries and people’s livelihoods. However, instead of focusing on job loss, we should look at how technology can simplify burdensome tasks, such as paperwork.
“This will free up time for safety and construction experts to
focus on improving standards through training, coaching, and trend analysis,” Leach explains. Deloitte’s State of Digital Adoption in Construction Report 2023 found that the main barriers to technology uptake include a lack of digital skills in the workforce (44%), budget limitations, and a lack of confidence in those skills.
Ben notes that the growing trend toward vertical construction in New Zealand, driven by the move towards higher-density neighbourhoods and precincts, presents an opportunity.
As construction workers upskill, they can adopt technology and provide new entrants to the workforce with the chance to utilise innovative tools and working methods. This, he believes, will attract younger, tech-savvy generations to the sector.
Insight, capability and change
“Having easy access to information enables managers to analyse health and safety and operational performance in real-time, which leads to better risk and operations management,” he says.
“Centralising safety and site operations into one system eliminates the hassle of using multiple platforms, which can stifle growth and waste valuable time. Going digital is the most efficient and effective way to produce high-quality data for reporting purposes.”
Can infrastructure pay for itself?
NZ Infrastructure Commission explores the possibilities
New research from the New Zealand Infrastructure Commission is examining whether public infrastructure investments, such as roads, schools, hospitals, and water systems, can eventually generate enough revenue to cover their own costs.
Peter Nunns, General Manager of Strategy at the Commission, said that while the social and economic benefits of infrastructure are well understood, how these projects are paid for remains less clear. He noted that all infrastructure must be funded somehow, but the mechanisms for doing so are not always straightforward.
The challenge of funding new infrastructure
One common method of funding new infrastructure is through higher user charges or increased tax rates. However, according to a recent Ipsos
survey, although many New Zealanders support increased infrastructure investment, few are willing to pay more through taxes or charges to make it happen.
An alternative approach is to invest in infrastructure projects that indirectly generate revenue—by stimulating economic activity or increasing usage, for example—leading to higher returns from existing taxes, rates, or user fees. The Commission’s latest report, Paying it back: An examination of the fiscal returns of public infrastructure investment, explores when and how this model is viable.
When infrastructure pays for itself
According to the report, projects that are cost-effective and serve a large population are more likely to recover their costs through increased revenue. Prioritising high-value projects can enhance New Zealand’s ability to invest in future infrastructure needs. However, the threshold for a project to fully pay for itself is extremely high. Nunns explained that the government typically only captures a small portion of the economic value created through infrastructure investments.
For a transport project to break even fiscally, it must deliver social and economic benefits at least five to nine times greater than its cost to generate enough new tax revenue.
The report also highlights that incremental infrastructure expansion—adding to networks bit by bit as demand grows—tends to deliver better fiscal returns. In contrast, large-scale “big bang” developments often fail to produce enough revenue and must be subsidised from general taxation, potentially at the expense of other critical services like healthcare and education.
Insights from local councils
One of the report’s case studies looked at seven large or rapidly growing urban councils over 25 years. It assessed how much each spent on infrastructure to accommodate population growth, including both construction and maintenance costs.
The findings showed mixed outcomes. Some councils managed to recover their costs through increased rates revenue and development contributions from new buildings. Others, however, spent more than they gained.
The report also highlights that incremental infrastructure expansion—adding to networks bit by bit as demand grows—tends to deliver better fiscal returns. In contrast, large-scale “big bang” developments often fail to produce enough revenue and must be subsidised from general taxation, potentially at the expense of other critical services like healthcare and education.
Councils that scaled infrastructure growth in step with population increases were significantly more likely to break even or generate a surplus over the 25-year timeframe.
Beyond the bottom line
While revenue generation is an important consideration, Nunns stressed that the core purpose of public infrastructure is to improve community wellbeing, not necessarily to be profitable. However, with the dual pressures of an ageing population and slowing productivity growth straining public finances, fiscal sustainability will need to become a more prominent consideration in infrastructure planning.
Report highlights and case studies
The Paying it Back report includes three detailed case studies to illustrate how different types of infrastructure investments perform financially:
Local government infrastructure (2007–2031):
This case study analyses infrastructure investment across seven councils— Auckland, Hamilton, Tauranga, Wellington, Christchurch, QueenstownLakes, and Dunedin—to assess long-term fiscal impacts of populationdriven growth.
Major transport projects:
The study evaluates the fiscal returns from four significant transport initiatives:
• Ōtaki to north of Levin (O2NL) motorway
• Pūhoi to Warkworth motorway
• Warkworth to Wellsford motorway
• Auckland’s City Rail Link (CRL)
Value capture scenarios:
A hypothetical analysis tests the effectiveness of a value capture levy—a tool that collects a portion of increased property values resulting from infrastructure improvements. Different project characteristics and population densities were modelled to assess the impact on revenue recovery.
Key takeaways
The report outlines four key lessons for boosting revenue from infrastructure investments:
• High-quality, costeffective projects serving more users tend to generate stronger fiscal returns
• The threshold for a project to fully pay for itself is high
• Incremental growth in infrastructure often yields better financial outcomes than large-scale projects
• Attaching dedicated revenue streams, such as levies or targeted rates, can significantly improve fiscal sustainability.
As New Zealand continues to grapple with infrastructure needs amid fiscal constraints, these findings provide valuable guidance for decisionmakers looking to balance public benefit with economic reality.
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Swearing on site Venting, bonding, or bullying?
Swearing has become so much a part of our culture that many probably hardly notice it. The odd F-bomb seems to slip into our daily conversations as regularly as asking what is for dinner, but what if the language we take for granted isn’t as harmless as it seems?
Swearing on the worksite serves several functions, and not all of them are negative. In many cases, it’s simply a form of venting – an instinctive release when things go wrong. When you’re working in high-pressure, physically demanding environments, frustration is inevitable. A welltimed expletive can act as a release, letting off steam in the moment and helping workers reset without slowing down. According to Psychiatrist.com, swearing signals an area of the brain known as the amygdala to release adrenaline. This release of hormones subsequently leads to a soothing effect.
Then there is the camaraderie factor. Studies suggest that the use of profane language can lead to tighter emotional and social bonds and a harmonious environment. Swearing can act as social glue on the jobsite – a sort of form of trust that indicates a close bond. Shared banter, even if laced with mature language, can
Swearing on the worksite serves several functions, and not all of them are negative.
In many cases, it’s simply a form of venting – an instinctive release when things go wrong. When you’re working in high-pressure, physically demanding environments, frustration is inevitable.
create a sense of team identity and mutual understanding. In this sense, it’s not much different from sports teams or corporate teams, where intense environments give rise to blunt, unfiltered speech.
But while swearing can unite, it can also divide. The line between bonding and bullying can be thin. The use of profanity can be used to humiliate, and when strong language is turned toward individuals, especially
repeatedly, it can quickly change from expressive to oppressive. What’s considered “normal” banter to one might feel hostile or alienating to another, especially if there are differences in age, gender, background, or experience.
Efforts to improve inclusion and mental health on worksites are starting to gain momentum, but language and how we casually communicate remain a blind spot. A culture that tolerates – or even celebrates
– aggressive or explicit speech may inadvertently reinforce the idea that only certain types of people “belong.”
So where is the line? It’s not about banning swearing altogether; not many would want a site free of all colourful language and character. But being aware of the intent and impact of our language is really important. Swearing used to blow off steam or share a laugh is one thing. Swearing used to intimidate, belittle, or exclude is something else entirely.
Any sort of construction or trade is a team sport. Like any good group, communication is key. And while the occasional F-bomb and outburst of mature language might fly, the way we speak on site should reflect the kind of environment we are trying to build on the worksite.
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BYD Shark 6:
The hybrid ute causing a commotion
If you’ve ever wondered what would happen if you blended the practicality of a work ute with the performance of a sports car and the efficiency of an electric vehicle (EV), then the BYD Shark 6 might just be what you’d imagine.
This plug-in hybrid ute is setting a new standard in New Zealand’s traditionally dieseldominated pickup market.
Performance that surpasses expectations It’s fair to say that, as the first plug-in hybrid ute to hit Kiwi shores, the BYD Shark 6 has made a strong impression. The Launch Edition Premium AWD model, which sits alongside heavyweights like the Ford Ranger Sport 2.0 and Toyota Hilux SR5 Cruiser, packs a punch with a combined power output of 321kW from its 1.5-litre turbocharged petrol engine paired with dual electric motors.
The result? An impressive 650Nm of torque and acceleration from 0 to 100km/h in just 5.7 seconds – figures that might make even some sports cars envious.
But the Shark 6 is more than just a powerhouse on the road. It offers up to 100km of pure electric range and a combined range of 800km, making it a great option for long trips or city
commutes. The towing capacity, while not matching diesel rivals at 2,500kg with trailer brakes, is still more than adequate for most needs.
Cutting-edge hybrid technology
At the heart of the Shark 6 is its Super Hybrid technology. This cutting-edge powertrain combines a 1.5-litre turbocharged engine with dual electric motors, achieving performance akin to a 4.0L V8 engine but with far fewer emissions.
With the EHS (Electric Hybrid System) and a dedicated all-wheel-drive powertrain, it offers a thrilling driving experience without sacrificing fuel efficiency.
The BYD Blade Battery, a lithium-ion phosphate (LFP) battery, ensures longer-lasting power, increased range, and improved safety compared to traditional designs. This battery technology makes the Shark 6 a true game-changer in the world of hybrid utes.
Plenty of tech
As you’d expect, the Shark 6 is packed with modern tech. The V2L (vehicle-to-load) function allows the ute to transform into a mobile power station, making it ideal for powering tools on
job sites or providing electricity in off-grid locations.
Inside, the Shark 6 features an impressive 10.25-inch LCD instrument panel and a rotating 15.6-inch adaptive screen that provides a futuristic and intuitive driving experience. The cabin is designed with comfort in mind, offering heated, ventilated, and electrically adjustable front seats, as well as rear seats that recline by 27 degrees – a feature rarely seen in traditional utes.
Comfort
Beyond its performance, the Shark 6 doesn’t skimp on comfort. The interior blends luxury with utility, offering what you could say is a refined experience in a traditionally rugged segment, ensuring a comfortable ride, whether you’re navigating city streets or heading out for an adventure.
Safety first
The Shark 6 integrates the ultra-high safety Blade Battery along with a high-strength steel frame, thanks to BYD’s CTC technology, ensuring occupants are protected in the event of a collision. The vehicle also comes with a range of advanced safety features, including hill hold control, vehicle dynamic control, and hill descent control, providing enhanced peace of mind for drivers.
Overall
The BYD Shark 6 is something entirely new for the New Zealand ute market, bridging the gap between traditional ute capability and the modern demand for hybrid efficiency.
While its towing capacity might not match that of its diesel counterparts, the Shark 6 offers impressive performance, genuine electric-only range, and a suite of innovative features that make it a compelling choice for city tradies, lifestyle buyers, and anyone looking to reduce their carbon footprint without sacrificing utility.
Competitively priced against high-spec traditional utes, it delivers a sophisticated blend of power, technology, and efficiency that could very well reshape what people expect from a modern ute.
For those ready to embrace electrification without compromise, the Shark 6 is worth serious consideration.
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Associate Professor in the Department of Civil and Natural Resources Engineering at the University of Canterbury, Dr Brian Guo lists three adjectives that will shape the future of engineering: digital, sustainable, and resilient.
“It’s a pretty awesome time to be in the field!” he exclaims. “In a nutshell, the future of engineering is all about using cool tech, protecting the planet, and building things that can stand up to whatever life throws at us.
Digital
“First, digital,” he says. Whether it’s AI, 3D printing, or smart sensors, engineering is more tech-driven than ever. “These tools are helping us design and build things faster, smarter, and with way more precision. It’s like giving engineers superpowers to solve problems we couldn’t tackle before.”
Brian says this is where automation and AI come in. Faster, more accurate, and of higher quality, embracing these technologies means getting more done with less human effort. This might mean robots handling bricklaying or site inspections, and AI optimising project schedules and reducing waste. “These technologies can take over repetitive, time-consuming, or physically demanding tasks, freeing up people to focus on more
it—30 years ago, jobs like ‘app developer’ or ‘data analyst’ didn’t even exist. The key is to adapt and upskill. Governments, industries, and educators need to work together to make sure people are prepared for these changes.”
The construction industry could benefit from robots and cobots (collaborative robots) to handle repetitive and hazardous construction work, such as on masonry walls, prefab elements assembly, and interior finishing. But these bots cause safety concerns when you consider how workers interact with them in shared workspaces.
It’s a pretty awesome time to be in the field! he exclaims.
In a nutshell, the future of engineering is all about using cool tech, protecting the planet, and building things that can stand up to whatever life throws at us.
creative, strategic, and highvalue work.”
When I asked David whether you and I are right to fear automation and AI, he admitted that, like many, he’s wrestling with it too. “If automation, robots, and AI can improve productivity, then I believe the general public should embrace and adapt to these changes rather than fear them.
“New Zealand, like many countries, has a low productivity issue. What
does that mean? Basically, it means we’re not getting as much output from the work we put in compared to other countries. Low productivity leads to slower economic growth, which in turn means lower salaries and fewer resources for things like healthcare, education, and infrastructure. It’s a big deal.”
He says that while some roles will indeed change or disappear with the rise in automation, history shows new tech means new opportunities. “Think about
Brian has been working with UC Doctoral student Zhe Zhang and A/Prof Goh Yang Miang (National University of Singapore) to address the emerging safety issue of human-robot collaboration in construction. They immerse workers in virtual reality to test their situational awareness and determine what safe robotics systems on construction sites actually look like. The immersive, realistic approach is a significant step toward successful hazard recognition performance. Robots work with and around humans, and never the opposite, after all.
“The bottom line is this: automation isn’t about replacing humans—it’s about making us more productive. And in a country like New Zealand, where productivity is a major challenge, embracing these technologies could be a game-changer. It could lead to higher wages, better-
Sustainable building isn’t just a trend—it’s a smarter way to build for the future. It’s about balancing cost, performance, and environmental impact to create spaces that work for people and the planet.
quality work, and a stronger economy. So instead of fearing automation, we should see it as a tool to help us build a brighter future.”
Sustainable
“Second, sustainable—this is a huge one.” Engineers are at the forefront of sustainability, making and maintaining our green built environment. Whether it’s life cycle assessments or renewable energy systems, David says the field is all about creating solutions that don’t just work for us now, but also leave a better world for future generations.
“The building industry contributes to greenhouse gas emissions (30%), energy consumption (40%), and waste (32%) worldwide.”
There are many misconceptions about sustainable building practices: too expensive, not worth the effort, too complicated, worse on performance, and only for experts. Brian says the truth is that sustainable building is more accessible every day.
“A lot of folks assume that going green means spending a ton of money upfront, but they don’t always see the long-term savings. For example, energy-efficient buildings might cost a bit more to design and build, but they save heaps on power bills over time. It’s an investment that pays off.
“People sometimes think that eco-friendly materials or designs are less durable or functional, but that’s just not true. In fact, many sustainable materials are just as strong, if not stronger, and they often come with added benefits, like better insulation or improved air quality.”
And it’s not just about the environment. “While protecting the planet is a huge part of it, sustainable practices also focus on creating healthier, more comfortable spaces for people. Things like natural lighting, better ventilation, and non-toxic materials make buildings nicer to live and work in.”
Another research project that Brian is involved with explores energy retrofitting school buildings nationwide to reduce energy use and greenhouse gas emissions. It looks at the relationship between lifestyle cost and assessment, energy consumption, and thermal comfort to identify the optimal retrofit package that balances environmental and economic goals. Decisions regarding school buildings in New Zealand are never straightforward. This research aims to support decision-making processes for the education sector, which will contribute to the bigger picture of achieving New Zealand’s 2050 net-zero carbon emission target.
“Both projects highlight two big values for the future of engineering: sustainability and human-centric tech design. The school retrofit project focuses on cutting energy use and emissions in buildings, showing how engineering can help fight climate change and hit net-zero goals.
“The VR project uses immersive tech to make construction robots safer for workers, putting people first when designing new systems. Both projects show engineering’s role in creating a greener, safer future.
“Sustainable building isn’t just a trend—it’s a smarter way to build for the future. It’s about balancing cost, performance, and environmental impact to create spaces that work for people and the planet.”
Resilient
“And finally, resilient— our world is facing more challenges, like climate change, natural disasters, and even pandemics. Engineers are focusing on designing infrastructure and systems that can bounce back from these shocks. Whether it’s buildings that can withstand earthquakes or cities that can handle floods, resilience is key to keeping communities safe and functional.”
New Zealand has a strong, innovative reputation for innovation, especially when it comes to sustainability and
resilience, he says. Given our unique environment and the challenges we face, like earthquakes and climate change, we’ve become world leaders in designing disasterresistant structures.
Resilience isn’t just a buzzword here; it’s a necessity. From seismic strengthening to climate-adaptive design, New Zealand engineers are constantly finding ways to future-proof our built environment.
Looking at the industry overall, there’s room for improvement. “One of the biggest opportunities is in research and development. Compared to other countries, New Zealand’s investment in academic research for civil and construction engineering is relatively low. If the government were to increase funding in this area, it could make a huge difference.
“This investment could focus on key areas like technology, automation, sustainability, and industry resilience—all of which align with our national strategy to improve productivity.”
Dr Brian Guo Associate Professor, Department of Civil and Natural Resources Engineering, University of Canterbury www.canterbury.ac.nz
The industry faces massive challenges. Higher building costs and economic uncertainty mean hesitance to start new projects, so fewer opportunities for construction companies and engineers. This has a ripple effect.
“Fewer projects mean less work, and that leads to the last issue—job losses. Unfortunately, when the industry slows down, people lose their jobs, and that’s been really hard on a lot of skilled workers and their families.”
Looking ahead
Brian says there have already been many changes in his field since his PhD in 2012. “The next decade will bring even more transformation.
“We’ll see a lot more work on digitalisation, automation,
The industry faces massive challenges. Higher building costs and economic uncertainty mean hesitance to start new projects, so fewer opportunities for construction companies and engineers. This has a ripple effect.
Fewer projects mean less work, and that leads to the last issue—job losses.
and sustainability—these are already big topics, but they’ll become even more critical as we tackle global challenges like climate change and resource scarcity.
Human-robot collaboration and the ethical implications of AI will also be huge areas of study, especially as these technologies become more integrated into our daily lives and industries.”
In line with this, Brian expects education and training to look very different, with a focus on interdisciplinary skills like coding, data analysis, and systems thinking. “Virtual and augmented reality could become standard tools for teaching and research, allowing students and academics to simulate complex scenarios and visualise datain new ways.”
The same goes for researchers. “With so much information and technology at our fingertips, the real challenge will be identifying the right problems to solve and framing them in a way that leads to meaningful solutions.” He predicts openaccess journals will become the norm, bridging the gap between academia and industry and making research more inclusive and impactful.
“At the same time, I think the academic community has started valuing quality over quantity when it comes to publications. Instead of focusing on how many papers someone has published, we’ll care more about the depth, originality, and real-world impact of their work.”
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New homes smallest in a decade
Figures from Statistics
New Zealand have revealed the total floor area of consented new homes was just over 4.7 million square metres.
This marks a 7.2% decrease compared to the year ended January 2024. It’s the lowest for a January year since 2015, says Stats NZ economic indicators spokesperson Michael Heslop.
New Zealand homes have been shrinking for a while now. In February 2023, Stats NZ reported the median floor area of new homes had decreased by 10%; in 2022, it was 126 square metres, and in 2021, it was 140 square metres.
Michael Heslop says it’s due to an increase in the number of multi-unit homes consented to. Apartments, townhouses, flats, and retirement village units tend to be smaller than standalone homes.
But stand-alone homes are getting smaller, too. “Ten years ago, more homes were being consented with a floor area above 200 square metres than below. This has shifted in recent years, with more homes being consented with a floor area below 200 square metres,” he said in 2023.
Average floor areas are influenced by garages in
By Ben O’Connell
New Zealand homes have been shrinking for a while now. In February 2023, Stats NZ reported the median floor area of new homes had decreased by 10%; in 2022, it was 126 square metres, and in 2021, it was 140 square metres.
Michael Heslop says it’s due to an increase in the number of multi-unit homes consented to. Apartments, townhouses, flats, and retirement village units tend to be smaller than stand-alone homes.
houses and townhouses and shared spaces in apartment buildings, such as corridors and basement car parking.
Denser cities and neighbourhoods, so homes with smaller floor areas, are New Zealand’s response to the housing crisis. Smaller homes and more multi-unit developments make sense as demand increases, yet these sacrifices generally haven’t translated to more affordable housing.
Take the Auckland Unitary Plan, implemented in 2016. Though it facilitated the construction of approximately 22,000 additional homes between 2016 and 2021, leading to a 50% increase in consents, housing affordability challenges persist.
In 2019, the annual Demographia International Housing Affordability study deemed all major housing markets in New Zealand “severely unaffordable,” with median house prices
exceeding six times the median annual household income.
High-density housing does lead to lower house prices, reduced traffic, and lower infrastructure costs in the long run. It also creates better job markets, fosters innovation, and allows businesses to specialise. Studies suggest increasing housing density in cities like Auckland could significantly boost productivity and wages.
Still, New Zealand’s current housing policies force people into less productive areas, which lowers our GDP and living standards. Minimum lot sizes, height restrictions, and limits on apartment construction reduce housing supply, driving up prices and pushing people to less productive regions. Infrastructure funding that prioritises sprawl over urban intensification also contributes to the problem.
House prices are forecast to rise modestly this year and next, following a decline in 2024, per a Reuters poll of housing experts. They cite lower interest rates as the key driver. The Reserve Bank of New Zealand has cut interest rates to support house price recovery, which fell nearly 20% from a late 2021 peak.
That decline is only about half of a more than 40% surge during the pandemic, pricing many first-time home buyers out of the market.
“We see a bit more potential upside in the market this year given mortgage rates are falling faster and probably by more than we had been anticipating three to six months ago, but not by a great deal,” said Infometrics’ chief forecaster Gareth Kiernan.
“Given that housing still looks relatively unaffordable, we expect that through the course of this year, interest rates will still be a reasonably important driver.”
Without broader policy changes to increase supply and improve affordability, the housing crisis will likely persist despite the shift to smaller, denser homes. While lower interest rates may provide some relief, they alone cannot address the structural issues driving high housing costs.
Insolvencies are on the rise
How
contractors can protect their business
Steve O’Dea of Anderson Lloyd
The construction industry can be tough, even when the economy is strong. When the economy turns sour, risk mitigation strategies are vital.
Times are still tough
Global economic activity is expected to remain subdued in the near term according to the Reserve Bank’s February 2025 Monetary Policy Statement. Activity remains below trend, and “[t]his reflects falling activity in interest rate sensitive sectors such as construction”. Growth is expected to recover during 2025, but the speed of that recovery is uncertain.
Construction sector leads credit defaults, and insolvencies are high
Inflation and interest rates have been a constraint for construction clients. With slow and uncertain work pipelines, aggressive pricing can lead to tighter profit margins and cashflow concerns. This puts a strain on businesses.
Credit defaults have hit the construction sector particularly hard, with construction defaults up 35% year-on-year, the largest increase of any sector (February 2024, Credit Indicator issued by Centrix). Company liquidations across all sectors are up 38% compared to the previous period. Centrix reports, “Notably, in January, 24% of these insolvencies were attributed to the construction sector”.
In this environment, contractors need to be alive to their risks. Proactively managing such risks
Credit defaults have hit the construction sector particularly hard, with construction defaults up 35% year-on-year, the largest increase of any sector (February 2024, Credit Indicator issued by Centrix). Company liquidations across all sectors are up 38% compared to the previous period.
can preserve cash flow and protect contractors in conditions where issues and disputes are more common.
Contracts
that work for you
Getting the contracts right saves a lot of trouble:
• Know who you’re dealing with: Does the client have enough contingency? How financially healthy and reliable is the supply chain?
• Allocate the risks: Are the risks allocated to the person who can control each risk? Can that person afford those risks?
• Align the contracts: Do the subcontracts align with the client contract? If not, the gaps can leave a contractor exposed.
• Align the pricing: A fixed price client contract and uncertain subcontractor/supplier pricing can lead to losses.
• Write up the contract: Even if the building work costs less
than the $30,000 mandatory threshold for residential building work, have a written contract. This is vital for disputes relating to payment or scope.
Keep on top of admin and payment claims
Cash flow is the key to solvency. Good admin and getting payment claims right preserves cash flow and prevents expensive and time-consuming disputes.
• Payment claims to the client: If payment claims / invoices are set out in the format required by the Construction Contracts Act 2002 (the Act), contractors can get the benefit of the ‘pay now argue later’ concept which is useful when dealing with difficult clients.
• Payment schedules to subcontractors: Such enforceability under the Act also works for subcontractors against contractors. It’s important that contractors issue valid payment schedules. Otherwise, it will be the contractor who has to ‘pay now and argue later’.
An experienced quantity surveyor or project manager can prepare these documents and help contractors improve their cash flow and avoid expensive disputes.
Know your rights and responsibilities on retentions
There are many examples of clients and head contractors who went insolvent, and the retentions disappeared with them. However, the Construction Contracts
Contractors should check their retention money is being held properly by clients. In turn, contractors need to ensure they’re looking after their subcontractor’s retention money to avoid personal exposure to fines and losses.
(Retention Money) Amendments Act 2023 improved the protections for contractors and subcontractors.
There are now strict accounting practices (including reporting) for holding retentions. Noncompliance can lead to large fines and personal responsibility for directors.
Contractors should check their retention money is being held properly by clients. In turn, contractors need to ensure they’re looking after their subcontractor’s retention money to avoid personal exposure to fines and losses.
Know when to notify issues and raise disputes
Some contracts have strict notification requirements requiring contractors to raise any variations or issues in writing within a certain number of days or else lose the right to do so.
If an issue is raised but not resolved, contractors have access to adjudication under the Act, which is unique to the construction sector and provides a quick and cost-effective thirdparty decision without needing to go to court. Used right, this is a
powerful tool that can secure cash flow when there are disputes.
It’s
easier than it sounds
Many of these steps are about good habits, templates and processes. Spending a bit of time to get those right can help contractors maintain cash flow and weather the economic challenges until the boom times come again.
LOOKING FOR STAFF?
Steve O’Dea
Steve O’Dea is a construction law specialist at Anderson Lloyd. If these issues are relevant to you and you would like to find out more, you can find his contact details at www.al.nz/staff/odea-steve/
