Christchurch businesses are being warned that doing business will be "much more challenging" in six months' time while another prediction tips the construction industry to hit saturation point about then too.
Canterbury Employers Chamber of Commerce chief executive Peter Townsend is urging local business to think about where they will be in six to nine months, saying many firms were focused on the short-term.
"When you look at the scale of what we've got ahead of us, it doesn't matter whether you are in retail, hospitality, accommodation or construction, if you look six to nine months down the track and we start engaging in the real rebuild of Christchurch, it's going to be a completely different and much more challenging environment," Townsend said.
The problems were going to be the converse of what businesses were experiencing now.
"The problems are going to be: I'm going to run out of cash because I'm going to grow quickly; I'm going to run out of business because the nature of doing business is changing so quickly in this environment unless I'm forward-thinking; and I'm going to run out of scale because I won't be able to cope."
The issues were materials, working capital and labour, and they were increasingly going to confront Christchurch businesses.
"This whole rebuild is just about how we build scale."
Some forward-thinking companies had got their heads around it and it was driving the chamber's "Collaborate Canterbury" initiative where locals partnered with companies outside the region to achieve greater scale.
Part of that collaboration also was companies working with the banks on different financial instruments to help fund the expansion of firms, Townsend said.
International consulting firm MHW Recovery, which project manages commercial and domestic repairs for insurers Vero and AA Insurance, said it was getting through managing commercial building and domestic insurance repairs quicker than first thought.
MWH Recovery programme manager Chris Pile estimated saturation of the construction sector in Christchurch - when there are not enough tradesmen and subcontractors to go round - was six to eight months away.
Market saturation meant labour resources were committed with little available for new work.
At that point market forces would take over and as long as prices rose for labour, it would flow into Christchurch.
The issue then became how to accommodate the incoming workers, Pile said.
At present there was enough capacity in the building sector in Christchurch to meet requirements, he said. Pressure on the Christchurch building industry was sorting itself out, and the main contractors were still able to take on work and get on with it immediately.
- ? Fairfax NZ News
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