APRIL- MAY 2022
Construction as we know it is changing Supply chain disruption and rising material costs are putting additional pressure on construction firms already stretched thin, with many now turning to digital solutions, says Payapps Chief Operating Officer Tony Simonsen
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ccording to the latest New Zealand Core Logic data, construction costs in New Zealand have increased by 6.2 percent last year, largely due to rising commodity and raw material prices. Raw material shortages have meant continual price adjustments and ultimately price increases, making it difficult to accurately budget both time needed and material costs of a job. Particularly when you factor in cost pressures in other areas including labour costs and equipment hire. 40 infrastructurenews.co.nz
Escalating prices: The double digits this year as they continue to rise at the numbers speak for quickest rate in over four themselves
Highlighting this issue, the global consultancy firm Rider Levett Bucknall released a forecast of construction cost increases for capital and regional cities around Australia in 2022. The projections are that costs will increase by 2.5% in Darwin; 3% in Adelaide, Melbourne and Townsville; 4.5% in Perth; 5% in Brisbane and Gold Coast; and 5.6% in Sydney. In New Zealand, CoreLogic predicts that construction prices could grow by
years. Interest.co.nz analysed Stats NZ’s building consent figures and found that average residential building costs rose 4.3% over 12 months to the end of September 2021, and the cost of some types of dwelling increasing by up to 8.0%. That equates to an average construction cost of $2,484 per square metre for a new dwelling, up from $2391 in the 2020 September quarter. Based on the average size of 152 square metres,
that’s an additional $5,621 per dwelling. These numbers provide an indication of the challenges our construction companies and contractors are facing, and it still doesn’t include rapidly growing and exorbitant shipping costs and the fallout of month-long delays.
Digitisation in construction: A landscape of change
Our recent Frost & Sullivan study on digital transformation within construction flagged supply chain issues as one of the top
