Construction industry in New Zealand - Statistics & Facts

The construction industry in New Zealand contributes significantly to the country's economy. In the first quarter of 2020, over 184 thousand people were employed in this industry – a significant increase from just a decade prior. The GDP contribution similarly reached over 15 billion New Zealand dollars in 2019. In the North Island, population growth has propagated residential sector construction in Auckland. In the South Island, the Christchurch post-earthquake rebuild was responsible for the majority of construction sector work. The value of building consents issued across residential, non-residential, and infrastructure sectors has increased for the most part year-on-year, with employment in these respective sectors following a similar trend. The leading regions in terms of value of construction work in New Zealand were Auckland, Canterbury, Waikato, Bay of Plenty, and Wellington. The demand for construction-related occupations in all these regions except for Canterbury was expected to continue to rise. Despite the seemingly endless construction boom, problems with the building industry have been unveiled through recent major company collapses.

The Auckland region leads the nation in terms of total construction work value, particularly in regards to residential construction. Over the past three years, the change in the number of new dwellings consented in the Auckland region has continually increased. The New Zealand Government as well as Auckland Council have pledged to build 50,000 new homes in response to housing shortages. Aucklanders have faced increasing housing costs as a result of these shortages, with the average cost of a residential property close to hitting one million New Zealand dollars. Major companies in the residential construction market in Auckland included Fletcher Construction, Changda, Metlifecare, Oceania Group, CMP Construction, and G.J. Gardner Homes.

Since 2011, the construction industry in the country has maintained year-on-year growth. In the Canterbury region, the devastating earthquakes of 2010 and 2011 drove a lot of this growth with a vast amount of construction work in rebuilding homes and commercial establishments required. In 2014, the value of earthquake-related residential building consents in the Canterbury region reached a peak of 800 million New Zealand dollars. While the focus has been on the residential rebuild, work in the commercial sector is expected to continue into the future. Similarly, in Auckland, a surge of building construction across the region, comprising of hotels, motels, restaurants, and bars, led to a record high value of construction work completed in 2018. In fact, the overall construction volume growth was driven by non-residential building work.

Transport infrastructure construction dominated infrastructure projects in 2019. Companies such as Fletcher Building and Fulton Hogan have established themselves among the market leaders of civil construction projects in the country. The nation's infrastructure needs have evolved as the population has expanded. The New Zealand Infrastructure Commission (Te Waihanga) was established in 2019 to develop a 30-year infrastructure strategy for the country. The strategy aims to lay out the pipeline for major infrastructure projects based on long-term trends, economic performance, and social wellbeing.

Recently, the New Zealand Government announced plans to partner with New Zealand’s largest construction companies in a bid to address the recent issues of high-profile construction company collapses, poor-quality builds, and skilled labor shortages. The Construction Sector Accord aims to identify areas of concern in the construction sector, as well as developing a strategy on how to fix them. The Accord has been signed by many different companies across various industries with interests in the construction sector, including Downer, Watercare, Fonterra, and Tonkin & Taylor. Due to COVID-19 related restrictions, the construction sector has had to deal with challenges such as reduced cashflow, workforce disruption, and uncertainty in future projects. Because of this, the focus of the Accord has shifted towards industry resilience and recovery.

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Construction industry in New Zealand

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Residential construction

Non-residential construction

Infrastructure construction

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