'Critical' Auckland factories can reopen despite lockdown

13 September 2021

New Zealand is to give lockdown exemptions to some Auckland building product manufacturers to alleviate supply chain shortages that are threatening to paralyse house building.

The Ministry of Business, Innovation and Employment (MBIE) said some Auckland factories can restart operations even though the city remains under level 4 lockdown.

With numbers of Covid-19 cases falling outside Auckland, lockdown restrictions in the rest of the country have shifted to level 2, allowing most construction-related activities to restart.

But New Zealand is reporting increasing shortages of building materials and escalating construction prices.

The MBIE said the government will allow plasterboard, gypsum plaster, coated roofing steel and insulation to be produced in the city.

Auckland is New Zealand’s largest city and a major manufacturing centre. The country is currently witnessing a housing shortage, which has seen prices nearly double in the last seven years, cutting out lower income buyers.

The government has promised to ensure more houses are built, but supply chain shortages are threatening the delivery of additional housing.

New Zealand is experiencing shortages of finished products, as well as of raw materials such as steel, timber and plywood, after many international shipping firms shifted operations to serve larger international markets.

Finance minister Grant Robertson said: “There are supply chain issues that arise from alert level 4 as building products that are manufactured domestically are mostly [made] in Auckland.

“This is particularly the case for many items critical to residential housing construction, such as insulation, roofing and plasterboard.”

To be allowed to resume operations, firms must prove their products are a critical component of residential construction, that there is limited supply and that they have adequate health and safety measures in place, Robertson said.

Meanwhile, Toyota New Zealand said global supply chain disruption was delaying the arrival of products destined for the country’s showrooms.

Steve Prangnell, Toyota New Zealand general manager of new vehicles, was quoted by New Zealand Autocar as saying that “most models” were affected by the delays.

“With the Delta variant, many countries around the world have seen a surge in cases resulting in factories having to be shut down for periods of time,” he said.

“For Toyota, this has disrupted our supply of essential componentry parts for the vehicle manufacturing process.”

 Want to stay up to date with the news? Sign up to our daily bulletin.

CIPS Knowledge
Find out more with CIPS Knowledge:
  • best practice insights
  • guidance
  • tools and templates