NZCBIA report reveals the true scale of New Zealand’s construction sector

New analysis from the New Zealand Chinese Building Industry Association puts the construction sector’s true value at $94bn – nearly double commonly cited figures – reframing how the industry’s economic impact is understood 

New Zealand’s construction industry is significantly larger – and more economically complex – than traditional figures suggest, according to new analysis published in the New Zealand Chinese Building Industry Association’s (NZCBIA) State of the Sector 2025 report. 

Authored by independent economist Shamubeel Eaqub, the report estimates the total value of the construction sector at $94bn, almost double the $45-50bn range typically referenced in public and policy discussions. The difference, Eaqub argues, lies in how the sector is defined. 

Rather than focusing solely on on-site construction activity, the report adopts a broader economic lens, capturing the full ecosystem that supports construction output. This includes subcontracting trades, wholesale building supply, logistics and transport, professional services, and compliance and regulatory activity – all of which are directly linked to construction outcomes. 

This wider definition better reflects the sector’s true economic footprint and highlights just how interconnected construction is with the rest of the New Zealand economy. 

Revenue decline masks the sector’s structural scale 

While the headline figure underscores the industry’s size, the report also documents the challenges currently facing the sector. 

Economic data presented in the 2025 report shows industry revenue fell by approximately $5bn over the year to August 2025 (reporting period), reflecting the depth of the current downturn. However, the outlook is cautiously optimistic, with early signs pointing toward a potential recovery in 2026 

By including aligned industries alongside core construction activity, the analysis shows that even in a downturn, construction remains one of New Zealand’s most significant economic contributors – both in terms of output and employment. 

A wider lens on the sector 

One of the defining features of the NZCBIA report is its deliberate expansion of what constitutes the construction industry. 

Rather than limiting analysis to primary building activity, the report incorporates sectors that enable construction to function at scale – from supply chains and distribution networks through to specialist professional services. 

The size and shape of the workforce 

At the end of the reporting time period, data showed that the construction industry: 

• Has lost more than 6,000 jobs since 2023.

• Directly employs 294,000 people.

• Employs a further 100,000 workers in industries highly reliant on construction activity, including quarrying, metals manufacturing and wood products. 

The workforce remains heavily male, with 84% of workers identifying as men, a modest shift from 86% two decades ago. The age profile is also changing. 

“The age mix of construction workers is generally younger than other industries, with more workers under 45 and fewer workers over 55,” said Eaqub. “The workforce has become even more skewed towards younger people over the past decade.” 

This shift is driven by a strong inflow of younger workers, combined with an accelerating exit of middle-aged and older employees. 

Retention remains a critical issue 

Alongside economic pressures, the report highlights the high cost of low staff retention. 

According to its analysis, 95% of hiring over the past decade has been to replace workers leaving the industry, rather than to grow capacity. Firms are spending significant resources on recruitment and training, while absorbing the costs associated with high turnover. 

“Construction firms are spending a huge amount of time, effort and money to recruit – and this cost is recurring due to low retention,” said Eaqub. “This also comes with additional costs, both direct and indirect, including disruption, lost institutional knowledge, reduced efficiency and impacts on culture and health and safety.” 

Only 33% of new hires enter the industry with prior qualifications or experience. However, the report shows investment in training delivers clear returns, with 86% of trained workers receiving above-average wage increases. 

“Literature suggests this is because firms with trained workers have improved financial outcomes,” said Eaqub. “It is not simply a higher cost of doing business, rather a shared return of training to both the worker and the business.” 

Health and safety as a productivity lever 

The report also identifies health and safety performance as a key, and often under-recognised, driver of productivity. 

Construction currently loses around 8% of working days to injury, equivalent to approximately $2.2bn in wages and profits each year. Improving health and safety outcomes, the report argues, would increase sector capacity, improve efficiency and support better labour retention. 

“This requires a coordinated approach to identifying and managing critical risks, and having the right leadership and management qualities inside businesses to unlock those non-health and safety benefits,” said Eaqub. 

Setting the foundation for what comes next 

The economic analysis contained in the State of the Sector 2025 report establishes a foundation for broader discussion around workforce capability, productivity and business resilience. 

By quantifying the construction sector at $94bn, the report reframes conversations around investment, skills development and long-term planning – particularly as the industry positions itself for the projected upswing in the cycle. 

As NZCBIA President Frank Xu notes, the intent was never to produce a static snapshot. 

“We wanted to uncover the real story. With its extended scope, this report aims to achieve that.”