Dr Wolfgang Scholz, Director Heavy Engineering Research Association (HERA)

The New Zealand heavy metals engineering industry overall had an outstanding year of growth. The 12 monthly rolling totals for heavy steel usage in NZ end of September stood at 151,000 tonnes p.a., while a year earlier it was 130,000 tonnes, an increase of close to 16%.

However, the fact remains that the industry is still around 20% below its October 2008 pre-GFC peak of 179,000 tonnes of heavy steel usage – so there’s room for further growth.

Looking specifically at sub-sectors, steel construction was the winner with considerable market share growth particularly in multi-storey construction in Canterbury, where market studies indicate that 70% of buildings currently under construction are going up with a structural steel frame. The New Zealand steel fabrication capacity discussion continues but with less intensity.

Main clients are realising that the industry is responding to increases in demand by putting more highly efficient plant in with expanded capacity. They also recognise the capacity reserves by the industry with potential for multiple shifts, something which can be done with relative ease in the factory-based steel construction environment.

No doubt the year’s biggest industry achievement was the introduction of the Steel Fabrication Certification (SFC) scheme in a joint effort between HERA and Steel Construction New Zealand (SCNZ), and industry members. In a short time, eight New Zealand steel fabricators have achieved the SFC and ISO 3834.2 certification.

This new scheme raises the bar by providing independent, expert certification of New Zealand steel fabrication companies. The scheme ensures participating fabricators have appropriate personnel and quality management systems in place, meeting national and international best practice standards giving assurance to its clients that indeed the expected quality is being achieved.

The general and not steel-construction focused sectors of our industry had a more mixed year. Industry feedback indicates that especially companies with export portfolios have had a tough year and some had to retrench and lay off staff. However, as the 2013/14 statistics of the heavy engineering export collective shows, exports despite the high exchange rate were up by 4% and some members indicated they could have gone one better if they would have had more easy access to qualified staff.

And looking ahead, industry confidence is high with particularly the construction industry pipeline prediction indicating further construction-related growth for at least the next three to four years. The international steel price development will likely not lead to major steel cost changes, providing a predictable commercial environment for the most significant material input.

This positive demand prediction, coupled with the industry’s attitude towards innovation, will provide the required framework for industry members to move forward with confidence and invest further in their future.