Regional building, wages booming

ALAN WOOD
Last updated 08:51 06/02/2013

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Canterbury is experiencing significantly stronger wage growth in the construction industry than the rest of New Zealand and builders say the work rates could be even higher than official figures.

At the same time, official figures show that more jobs are being filled in the region.

One leading builder in the Canterbury residential reconstruction said figures released by Statistics New Zealand yesterday could underplay the pay growth.

Salary and wage rates, including overtime, in the Canterbury construction industry rose 3.9 per cent in the December 2012 quarter compared to the same quarter in 2011, Statistics NZ said.

In comparison, the construction industry in the rest of New Zealand rose 2.3 per cent in the December quarter, from the same period a year earlier the agency said.

The total number of filled jobs in the Canterbury region had returned to pre-earthquake levels, Statistics New Zealand said.

Leaders of Christchurch's construction industry were not surprised by the wage rate increases, saying they had been apparent since at least the middle of 2012 and in some cases from late 2011.

Stonewood Homes managing director Brent Mettrick said the 3.9 per cent wage rise sounded low to him.

"The industry has been relatively stagnant for a while in its wage growth, and of course now everyone's under extreme pressure, but also you've had a lot of [firms] coming into Canterbury - some with their own workforce and some without their own workforce. So there's been a lot of enticement between businesses to get the staff."

Wages started to rise for Stonewood when the Fletcher EQR building repair programme kicked into gear, he added.

Fletcher chief communications manager Barry Akers said the company's rates for contractors were established off a notional base rate of $45 an hour for carpenters.

That figure had been kept steady for the past two years.

Jobs that were in high demand included vacancies for project managers, quantity surveyors and labour managers, Mettrick and Registered Master Builders chief executive Warwick Quinn said.

"When there are several people wanting you to work for them, you will generally go to the higher bidder," Mettrick said.

Statistics NZ figures showed that Canterbury's salary and wage growth peaked at 4.3 per cent in September 2011 (year-on-year figures), then retracted before December's jump.

Mettrick noted recent Fletcher EQR comments that between $60 million and $70m a month was going into the Canterbury economy through payments to contractors to fix houses, and that equated to "an incredible amount of work happening in this industry locally".

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While the demolition side of the rebuild was starting to wane, the residential phase of the work was picking up "quite dramatically, and the commercial [rebuild] is at its beginnings, so there is a long- term prognosis of pressure on the wage book", Mettrick said.

Leighs Construction managing director Anthony Leighs said commercial projects had quickly ploughed into his firm's workload from January 15. There was some upward pressure in terms of wages including ongoing increases in carpentry rates.

"That's largely to be expected in an improving market. In the commercial sector the pressure hasn't built massively yet," Leighs said.

Statistics NZ figures show that, in Canterbury, the number of filled jobs rose 4.7 per cent for the year to the December 2012 quarter. The full-time employment rate rose 5.4 per cent, while the part-time employment rate rose 3.4 per cent during that period.

"This is the third quarter in a row showing an annual rise in filled jobs in Canterbury," the agency said.

- The Press

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