Dr Troy Coyle, CEO NZ Heavy Engineering Research Association (HERA)

2024 was a difficult year for construction and therefore manufacturing supply chains supporting it.

Our levy, which is legislated under the Heavy Engineering Research Levy Act, 1968, is a reliable indicator of sector activity (at least in the segments that use structural steel, such as multi-storey residential, commercial and bridges). In June this year, we experienced the lowest levy level of any month in more than ten years.

Boom and bust cycles are a pattern that is pretty consistent, and which we are not really learning how to avoid (e.g. through planned, transparent and sustainable infrastructure investments).

The consequence is that in the bust, which we are certainly in, there is a significant reduction in the employment of our skilled workforce. Then, in the boom, we no longer have the available skilled workforce available to meet demand. They have mostly gone offshore.

It would certainly help the sector if there was a bilaterally supported pipeline of national infrastructure projects, with a secured budget allocation, that were consciously timed to ensure stability of construction.

Combine a construction bust with an inexplicable proposed “reform” of the Vocational Education System introduced by the Hon Penny Simmonds, Minister for Tertiary Education and Skills in 2024, and things are not looking good for the future of our sector.

The link between boom and bust cycles and instability in our vocational education system means that looking ahead (possibly in 2026), construction-related manufacturing could experience an unprecedented skilled labour shortage when the market recovers.

Our industry is reliant upon skilled apprentices and concerningly, at the moment, there doesn’t seem to be a lot of Government support for work-based learning appearing within the planned “reform”.

For steel, there are also potential concerns with the proposed Building (Overseas Building Products, Standards, and Certification Schemes) Amendment Bill. The proposed bill will empower MBIE to recognise overseas standards.

This recognition is expected to be implemented by including these standards in Building Code Appendix B1.

Hopefully, MBIE will work with experts to determine the appropriateness of these standards for building products as they must be fit for purpose in our local UV, corrosive, seismic and geothermal environments, which are not commonly experienced in jurisdictions, such as Europe.

On the positive, we have found the Minister for Manufacturing, Hon Andrew Bayly, to be highly engaged with the sector.

We were able to host the Minister for a Ministerial visit to some of HERA’s manufacturing-related research collaborators in Australia, including the Australian Composites Manufacturing Cooperative Research Centre (ACM-CRC) and the Facility for Intelligent Fabrication at the University of Wollongong.

Through our relationship with the ACM-CRC, HERA is involved in some world leading research related to AI in manufacturing.

We are also developing significant local capability, through our $10.6 million Endeavour research project related to Construction 4.0, in the area of circular design.

I envisage that 2025 will see an expansion of our research focus in both AI and circular design. Perhaps the former will be a key way for the manufacturing sector to develop more resilience to the boom and bust cycles of construction.

The latter will enable our sector to become a leader in the circular economy.