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The Building Industry – we are not alone

I found a rather interesting article for the IWBC Conference (Industrialised Wood-Based Construction Conference 2018) in Boston that talks about issues in the US construction industry.

Reading through this, I thought that are a lot of parallels to the NZ building industry. Not only are we suing the same construction methods, but we seem to be having the same educational, societal and methodological issues. The reason for any labour shortage is different in NZ I believe but nevertheless we seem to be having one – particularly a skilled labour shortage (note the emphasis on skilled).

America needs houses, but there just aren’t enough people to build them. The average price of houses has gone up by 5% every year over the last three years. That percentage is even higher in cities for example, the Bay Area in California has seen a 30% rise in prices over the last three years.

Same issue here, particularly in Auckland. This is already leading to people leaving Auckland. I do not have the latest numbers but I am sure we have at least similar increases.

Some cities have tried to alleviate the housing shortage by relaxing building regulations or allowing builders to build higher, but these measures do little good when there are no workers to build the structures.

Well, based on our historical experiences, relaxing building regulations is certainly not a good idea. All you’ll get is worse performing homes, structural issues, quality issues. We do not have a self-regulating system that would give any good results. We need more better housing, not just more.

Construction industry profits are slim, so little is reinvested in research and development. Building is a high-risk business so investors are reticent to take chances on new technology.

This rings true for both construction methodologies, tool but also design. Isn’t it so easy to just copy yesterday’s design for tomorrow’s project? We know it will work, but will it still be effective?

According to the McKinsey Global Institute, the construction productivity rate has remained constant since 1945. While tools and building materials have evolved, innovation has been slow in changing the way we build residential houses.

We are effectively still building like several hundred years ago. We may not use timber dowels any more but nailers and not plaster in situ but use plaster board, but really that’s already kind-of it.

One reason is that land has been reasonably cheap and construction costs low so building you own home has been affordable. Another reason has been an abundance of cheap labor but, with the changing labor dynamic, costs are skyrocketing.

Land prices has have been ever increasing and due to labour shortage, the labour cost is quite high. Even people that have hardly skills and qualifications scoring well paid jobs, there’s hardly and cheap labour in construction. There are no real qualification schemes and you never know what quality you are getting.

A more controlled environment – even if it does not have forms of automation – would help immensely, eliminating working on scaffolds, at heights, with varying tolerances in debatable weather and wind. Wind and weather can actually throw quite a spanner into your productivity. Working to plans and tolerances would be cool too – how many times did framing, windows and doors come to site that did not fit.

We managed to get windows built as an element, managed to turn on-site plastering into boards, have even managed to fabricate pre-nailed elements if they only came to the right dimensions and quality. Let’s just go the next step bigger and manufacture wall panels off drawings and assemble all in a controlled environment – in the warm and dry. Let’s come up with systems. I dare not call if off-site construction or prefabrication.

Ingo Ratsdorf:
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