“Irregular Growth Affecting Building”

Press, Volume CVI, Issue 31085, 14 June 1966, Page 22

“Irregular Growth Affecting Building”

New Zealand’s building and construction industry has for many years exhibited a seesaw pattern of quickslow employment growth, says the “Labour and Employment Gazette”, published by the Department o f Labour. This irregular pattern of growth not only hampers planned recruitment and training of a skilled work force, but from time to time impairs the industry's efficiency and affects its ability to meet specific commitments. It also has a pervasive and far-reach-ing effect on the whole economy through the ancillary industries that depend largely upon building and construction for their existence, says the report Between April 1947, and April 1965, annual growth rates in the industry had fluctuated between —1.2 per cent and +9.6 per cent. Not only had there been broad periods of high and low rates of increase but sometimes the tempo had changed strikingly in a matter of months. For example, in 1948-49 there had been an increase of 4.3 per cent, in 1949-50 a decrease of .8 and in 1950-51 a jump of 8.3.

“The industry is particularly susceptible to stimulation by buoyant economic conditions and when this happens its appetite for labour is hard to satisfy. In April 1964 surveyed employment stood at 65,867 and there were 1894 surveyed vacancies; but one year later, although a jump ing employment to 69,612 had filled the earlier unsatisfied demand nearly twice over, there were even more vacancies—2s22 in all,” says the report. Experience had shown that up to a certain point rapid growth of employment in the industry was usually accompanied by an increase in the industry’s unsatisfied demand for labour (rather than the reverse, as could be expected) because the faster workers were drawn into the industry, the more it tended to accept new work and take advantage of what it regarded as favourable conditions. Not only did inflationary, conditions stimulate the industry, but the resulting excessive growth was itself inflationary. “It seems that in boom circumstances, the industry is

eventually Inclined to over reach itself, with the result that —* often quite suddenly —it stops growing. Rather than going into a decline, more usually it maintains existing levels roughly as a plateau and tse slowdown Is fed back through its dependent or assicated industries.” Over-commitment may be overcome naturally or may require Government restraints, says the report “As an example of natural slowdown. If over-production of large commercial buildings leads to a glut of unrentable office space, demand for such types of work will eventually slacken off of its own accord and a period of retrenchment will help restore the balance. But meanwhile, scare labour resources will have been committed to excessive production when they might have been engaged more usefully elsewhere. Timely Government action, on the other hand, may more quickly influence the use of the labour resources of the industry in such a way as to maintain a more even development" The gazette said that this was the sort of result that last year’s Government restraints upon the industry were designed to achieve. Programming of all larger construction projects was intended to even out demands on the industry. Some essential Government projects, such as construction of schools and hospitals and the development of hydro-elec-tric resources had to go on. but even Government construction activities were being held on a tight rein.

Other measures, such as import controls, credit restrictions and higher interest rates, could play their part in achieving the same end.