Post Covid Construction Gets into Gear

Building construction site with a crane in Auckland, New Zealand, NZ
Published: 22 May 2020

From 23rd of March when we were made aware that the country was moving into lockdown, the race was on for the major construction companies to get their sites into hibernation, their support teams working from home, their supply chains paused. Workers lugged their big screens home and plugged in to the broadband and everyone, including the family and flatmates, got used to having zoom calls at all hours of the day.

Some of New Zealand’s largest projects were locked down in record time and now it seems many have rebooted just as fast – in many cases smoothly changing gears to be at near full production, despite social distancing requirements.

For Safari Group’s, Business Manager, Andrew Moore, the reboot has been smooth and the team hit the ground running and soon as the green light was given.

“As soon as we were made aware of the lockdown, we spent a couple of days slowly decamping our projects, making them safe, secure, taking on security guards etc. So, by that Thursday when we hit Level Four, our sites were protected, not only from theft, but also from weather,” he said.

Then, during the lockdown, Moore said all staff were charged with using the time wisely preparing for the reboot; quantity surveyors catching up on admin-type work, site managers helping the quantity surveyors, working through changes from tender drawings to full construction drawings.

“We actually found over that five-week period, in some cases, our teams were working better, or we were getting better results from consultants,” Moore says.

“We’ve also found that, rather than working on a day-by-day basis, we were actually looking further ahead. So, now that we’re back up and running, we’re actually a step ahead of everyone else. So  dare I say it, in some ways, that was actually one of the upsides to this whole COVID thing.”

Moore says that being quick off the mark has also put them in a strong position with clients.

“Clients saw that we were being proactive, minimising delay costs or additional costs of holding the construction site while we were on shutdown. Once again, we were able to please the banks, please the developers, please our staff, and get going at 100% on the 28th of April.”

The pandemic saw large numbers of migrant workers return to their hometowns and homelands, but Moore says lockdown labour shortages don’t appear to be an issue for the his company at this time.

“We paid all of our staff 100% of their usual pay during the lockdown – we do have a bit of a war chest here – and we would have carried on paying them another month, if need be.

“Although we did have a significant hit on income over that month. We’d normally turn over $20 million a month, and for the month of April, we would’ve turned over about $1 million. It’s 95% hit to our income for that period of shutdown.”

“But in saying that, we’ve managed to cut some pretty good deals with our developers. And with every one of the projects we’re building throughout the country, we’ve negotiated a payment and we’re moving forward.

Moore expects the industry will go through a bit of a decline over the next six months, but is hoping that the duration of his projects will bridge that gap.

“There are some small costs moving forward to deal with things like COVID-19 that we’re now having to build into construction costs, but certainly those are less than the savings we’re now seeing out in the industry through projects dropping off and people being a lot more hungry for work,” he said.

Gulf Contracting works on many of Auckland’s biggest projects and Roger Wimsett says it took a week and a half to get everyone back to work as the sites gradually opened up.

But the main issue for his team has been an  “absolutely monumental amount of paperwork” caused by lockdown delays.

“We’ve had to rebuild all the paperwork to the protocols of each company. All that documentation now goes somewhere between 64 and 85 pages long, and we’re working on say 20 – 29 different sites. That’s an enormous amount of documentation we’ve had to do, really drilling down on the actual tasks and how you perform them and all the rest of it, so that’s why it’s got to be so detailed.

“The main contractors are dictating the protocols that we’ve got to follow to actually get our guys back on site. We’re only one subcontractor, they have 20, 30, 40 on a job, and every one of those subcontractors has had to do what we’ve had to do.

Wimsett says working in close environments – “which building sites are” – is problematic for the company.

“Most of the sites are limiting to builders on Mondays, plumbers on Tuesday, electricians on Wednesdays…. That’s potentially becoming a little more relaxed as such under Level 2, but we’re not relaxing what we’ve got to do about guys being on site. That means trying to stay one meter apart on stairs and all that sort of stuff.

“Commercial Bay’s probably got maybe 2,000 guys on it. So how do you all keep two meters apart? Near impossible…

Wimsett also says that there are costs to be borne by his company, including having to supply hand sanitizer, hand wipes, masks, and all the additional PPE, to enable them to get them back to site.

“Some sites are now saying you’ve got to be covered totally – full arm and full legs – which is becoming more and more the accepted norm now for a lot of the construction work.

“The last thing anybody wants is a COVID case on a construction site. We can’t afford to be shut down, so these are the protocols that we’re going to have to follow to actually get back on site. We’ve just got to adapt and get used to it. This is the new norm,” Wimsett said.

Like others interviewed, Wimsett’s work pipeline is holding strong at this stage – the jobs that have started are continuing and it’s only those further down the pipeline that are starting to look shaky.

“We’ve got another two big projects we’ve had accepted, but outside that going further forward, I don’t know.

“There’s going to be a bit of carnage, I think maybe when the 12 week subsidy runs out, there may be another raft of things fall over. But we’ve been doing quite a bit of quoting over the last few weeks. We’re just going to play it by ear now, and like I say to my guys; ‘day at a time, week at a time’.”

Plus Architecture Associate Piers Bowman says the collaborative attitude of the construction industry has made the reboot process a lot smoother.

“I think it’s been relatively straightforward. There’s been a lot of communication and I think when you set the expectations, that enables you come back and get on with businesses as normal.

Bowman says being an office of an international company meant the team was comfortable working remotely and working with others across offices.

“So packing up shop and taking the computers home felt somewhat normal I guess, and those processes were already in place to enable us to work remotely and effectively as a team.

“I think architects are used to doing that now with everything in the cloud and there’s nothing really local anywhere that you really need. So that definitely made it easier,” he said.

Predictions of supply issues haven’t arisen as yet, Bowman says.

“All the jobs that were already on site just picked up where they left off. It felt like it was just a bit of a month-long holding pattern and then carry on as normal.

“With new jobs coming in, there is a bit of a feeling out process that’s still currently underway – just to see where all those smaller suppliers are at, how they’re being affected, and if that will have any effect on overall pricing for jobs.

“I think there’s a lot of positivity, but obviously a lot of people have also been hit quite hard. So who you talk to really seems to make all the difference,” Bowman says.

“And I think it just comes back to the attitude thing, right? Hate them or love them I think Jacinda and the team did manage expectations quite well. And we were also lucky to go into lockdown after a few other countries had had a surge, Italy being the main one, where it looked absolutely horrific. So I think were geared up for that. Things can be horrific, but as long as you know what to expect, people can get on with it.”

Bowman says social distancing in the workplace has had the biggest impact on projects they’re doing.

“Some hotels, for example, don’t a huge amount of space on site, so we have been looking at doing remote defect reviews. We’re still having teams meetings online for our site meetings with the contractors and clients and everyone just play it safe.

“But we’re also lucky on a few other sites – the Ports of Auckland car management facility -it’s a massive empty space, so that’s quite easy to social distance. I think the team there had marked out spaces on all the floors, so wherever you’re standing, you always know you’re two meters away from each other.

“It depends on the construction site. Some are easy and some it’s better for us to work remotely where we can. It’s not like we’re going to jump straight back into sites for full bore if there’s any risk at all.”

So is Bowman predicting any major failures in the construction sector in the near future arising from Covid-19?

“Hey, I’m sure there will be. With the lockdown, it’s essentially a lose-lose scenario. No one’s going to win. And I think that just comes down to expectations, people realising that you’re in it together, and if you try to come out on top, it’s going to be no good for anyone. But if everyone just takes a little bit of a hit, I think that’s kind of the best way forward.

“It just seems to me, if you’re going to be fighting it out, it’s a race to the bottom.

For Van Tang, General Manager New Zealand/Pacific for GHD, the lockdown brought with it a particular challenge. Tang only took over the role as the GM of New Zealand for the Pacific in mid-February this year and so, was pushed almost immediately into lockdown planning for her 600 local staff.

“Mobilising eleven odd thousand people (globally) to work remotely in a matter of a week across the whole business was quite amazing. I was very, very impressed with what our business did in terms of that,” says Tang.

“So yes, we were ready for the reboot. We had to be.”

Tang says that because we were in total lockdown, she saw greater impact for New Zealand’s construction sector than across the rest of their global business. Despite that, the business has shown its agility and recovered rapidly.

“We’ve got around 50% of our [team] back in the office at the moment, and we’re working with that. And we’re just waiting to see how long we’re in this alert level will be and what that might mean in terms of the long game.”

So has seven weeks of lockdown translated to a seven weeks delay in the physical sense for the projects they’ve working on? Tang says reactions have been mixed.

“Some clients understood our intent to make sure that people were continually engaged, but sometimes that didn’t flow through. On the other hand, some clients took the opportunity to really accelerate during the lockdown – and they did.

“But we did lose a lot of work. It did slow down unfortunately. There’s no doubt about that.”

Tang says the industry will take some time to get back to full productivity, believing the full lockdown was a lost opportunity, because the industry wasn’t able to take advantage of lower traffic volumes for example.

“I’m hearing of some supply chain issues in Australia. However, they maintained construction during the lockdown – and they’ve been in lockdown for seven or eight weeks.

“I’m not hearing that as much here yet, but I think that’s possibly because we probably haven’t got our orders in yet because of the lockdown. We’re beginning to get our orders through now, so that’s something we may be hearing in the future,” Tang says.

“What we’ve learned in the last period is we’re now operating in the unknown. And that doesn’t mean it’s stopped now because we’re rebooting and going back into the office and back into community. It’s actually quite the opposite. I think the impact will play out for some time and that it will play out globally at all different levels.

“So yeah, we’ve got our eye on the long game here. We’re not viewing this in any way, shape or form as a short term exercise at all.

“As far as we can see, New Zealand is the first country to go back into office. And other countries are certainly in the preparation for it in the next week or two, but we’ve gone back early. As I said to my colleagues in New Zealand, we go hard and we go early, right?

“As I kept saying to our people across these seven, eight weeks, what we’re saying now may be different next week. And that’s what I found. And trying to keep our people open and understanding of that as well, was certainly an opportunity, but also definitely a challenge.

GHD maintained their whole team throughout the lockdown and is waiting to see how the work pipeline shakes down. A number of projects have been deferred and shelved – “Understandably so,” says Tang.

“Like I said, this is on a global, whole of country, whole of world scenario. So I understand our clients are having to adjust – as we are – and continuing to work through their different scenarios.

“At the moment, it’s been quite tactical. Making sure we put our heads up and look at the horizon and what that might mean, but that’s got to be continuous, as I said, it’s the long game. We need to continue to work with our people, re-deploy where we can. We’ve got some areas that have still maintained, if not built capacity and capability during the last eight weeks, which has been really quite wonderful,” Tang said.

“I think what we’ve all learned is the strength of the company as individuals and as teams and what that might mean for the future. That’s something we’ve got our view on, the resilience of our people and the wellbeing of our people, and how we continually work to support that going forward.”