New Zealand's construction industry has seen relatively continuous growth over the past five years, contributing around 17.6 billion New Zealand dollars in gross domestic product (GDP) in the year ended September 2023. While the industry is expected to continue growing, meeting the infrastructure and housing needs of the country’s growing population will not be without its fair share of challenges.
In New Zealand, the construction sector includes residential builds, commercial builds, and infrastructure such as roads and energy services. All segments have grown due to increasing demand for housing, offices, roads, energy, fiber installation, and water supply. New Zealand’s housing market has been an important topic over the years, with larger metropolitan regions such as Auckland facing large housing shortages. The value of residential building consents issued across the nation has grown consistently over the past years. In terms of infrastructure construction starting in 2022, transportation and water infrastructure projects led by volume.
Risk of insolvency greater than ever?
In 2019, a number of construction companies in New Zealand were placed into liquidation or receivership, ceasing to trade within the country. Included were the Stanley Group, Tower Cranes, and Welhaus Limited. Millions were estimated to be owed by creditors. Considering recent events relating to the coronavirus pandemic, the situation was expected to worsen. The sector’s main industry body warned that as many as 30 percent of jobs in the sector were at risk, with many New Zealand-based infrastructure companies reportedly on the verge of insolvency. Many projects had come to a stand-still due to restricted working conditions, undoubtedly affecting the construction industry’s 182 thousand employees.