Construction sector facing $5bn boom

The National Construction Pipeline Report 2021 has forecast growth in excess of $5bn over the next six years

Despite Covid-19 disruptions, the Ministry of Business, Innovation and Employment (MBIE)-prepared report said the construction industry will grow by $5.7bn between now and December 2026.

New Zealand’s total construction value experienced a 5.7% dip to $42.6bn during the pandemic-influenced 2020. However, predictions expect that decline to be short lived.

Key findings show:

• The strength of the residential sector will push construction activity value to $48.3bn in 2024.
• 265,000 new dwellings are predicted to be consented over the next six years.
• Non-residential activity is forecast to reach $10.2bn in 2025 – a slight increase on 2020’s prediction of $10.1bn by 2025.
• Infrastructure activity is forecast to reach $11.2bn in 2026, compared to the previous forecast of $10.1bn by 2025.

Construction Sector Accord Transformation Director Dean Kimpton said the projections are incredibly encouraging.

“It’s pretty extraordinary to see such strong forecasts in the Pipeline Report. This time last year the predictions were fairly dire, but we now know the sector has built up an incredible head of steam since then, with record building consents. Our worst problems right now are not enough people and materials to do the job.”

Kimpton added this news should give builders the confidence required to invest in future-proofing their business.

“As a sector, we need to get ahead of the game. We need to invest in our people and cast a wider, more diverse net on recruiting. We need to up our game on innovation. We need to accept that climate change also means a change in how we build. At the Accord, we think this strong pipeline should give the sector confidence about the changes that are needed. The work is there. The investment will be worth it.”

The Construction Sector Accord is a partnership between industry and government that’s working to fix issues and challenges facing the construction sector. Through its three-year Transformation Plan, the Accord seeks to drive behaviour change to lift overall performance and achieve a safer, better skilled and more productive industry and to share good practice across the sector.