Is the construction sector in crisis?

Drive 06/08/2018
Photo: File.

New Zealand's large-scale construction industry will "die" unless there's a major "reset", Infrastructure Minister Shane Jones says.

The stark warning comes after crisis talks at the Beehive between Government ministers and industry heads, following the demise of several construction companies. 

According to Mr Jones, New Zealand's construction industry is on its way to the emergency room and is in need of urgent attention. 

"This is a health episode, and when a health episode strikes either an organisation, a sector or an individual, you do a reset - or else you contemplate certain death," Mr Jones told Newshub. 

Ebert Construction went into receivership last week, owing $40 million to creditors - costing 80 jobs and leaving the future of 15 projects in doubt. 

In addition, the country's largest construction company, Fletcher Building, announced a complete pull-out of "vertical construction" earlier this year after losing hundreds of millions of dollars on low-margin projects, including Auckland's SkyCity convention centre and the Justice Precinct in Christchurch. 

"If we don’t have a construction sector that’s robust, we’re going to end up possibly outsourcing this to overseas or it’s going to impede the ability of the crown to deliver on its own infrastructure-construction projects,” Mr Jones told RadioLIVE Drive. 

Mr Jones warns it's threatening the viability of the industry in New Zealand - the loss of which would be a huge strategic blow to the country, which could be forced to outsource large projects to foreign companies.

Ministers on Monday promised to remind agencies of that goal in an effort to support the distressed construction industry.

Listen to the full interview with Shane Jones above.

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