A shortage of building supplies is preventing the construction sector from delivering projects on time and within budget.
Plumbing, electrical and glass suppliers are reporting difficulties getting their hands on basic materials because supply lines had been stretched by the pandemic.
Active Electrical Suppliers general manager Kevin Pollock said he had been finding it progressively harder to bring products in since the middle of last year.
“The consequences of these delays means that the product installation by trades personnel is also delayed and in some instances alternative products are sourced but this requires additional time and resources to manage as well.
“So it becomes a more complex issue.”
RNZ spoke to glass, tile, and heating and ventilation suppliers who were reporting similar delays.
Master Plumbers Association chief executive Greg Wallace said the challenges were the result of a unique set of circumstances combining to create a perfect storm.
“What happened is suppliers [when Covid-19 first emerged] predicted a downturn on the basis of all the banks and everyone else predicting a downturn and reduced some of their forward orders.
“Most of the plumbing items come from overseas and there’s a lag of three to four months, so that’s one issue.”
That decision by suppliers had been compounded by an unexpected spike in home renovations as well as the severe congestion at the Ports of Auckland, Wallace said.
The country was not going to run out of supplies, but the delays were causing headaches for plumbers and gasfitters because if they had to change equipment half-way through a job it meant they would have go back to the council which would ensure there was compliance with the building code, he said.
To make matters worse, the supply of some products would fall when production in China slowed down for Chinese New Year celebrations in February, Wallace said.
Construction industry expert and partner at business advisory firm BDO, James MacQueen, said it was the construction firms that could end up paying for the delays.
If there were hold-ups with work such as plumbing – which was one of the first things to go into a project – it would delay all the other work that followed, he said.
“If it’s not planned correctly, it can be a significant issue because most building projects have a very clear timeline and then often, particularly the larger firms, there’s liquidated damages if a building is not finished on time.”
Liquidated damages are a financial penalty construction firms receive for each day a project is delayed.
MacQueen said there was a long-term risk the ongoing delays could see some firms fall over, in particular those that had a number of projects on the go facing similar challenges.
All the suppliers RNZ spoke to expected the delays to continue to at the least the end of March.
Their advice to customers was to be patient and be flexible.
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