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Wed August 15 2018

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New Zealand predicts sustained construction growth

30 Jul New Zealand construction’s traditional ‘boom and bust’ cycles look set to give way to sustained growth in for the next six years, according to a new report.

Jenny Salesa
Jenny Salesa

 More certainty in the construction sector will smooth the boom and bust cycle, says the 2018 National Construction Pipeline Report, which says there are signs of sustained growth for the six years ahead.

The 2018 provides a projection of national building and construction activity for the next six years, through to 31 December 2023. It includes national and regional breakdowns of actual and forecast residential building, non-residential building and infrastructure activity.

Minister for building and construction Jenny Salesa said that, for the first time since the Construction Pipeline forecasts were first published in 2013, the modelling forecasts sustained growth, reflecting strong construction demand nationwide.

“Further, national dwelling unit consents are projected to reach historic highs and we have already seen evidence of this with consenting in Auckland currently at its highest level for 15 years,” she said. “New Zealand’s traditional construction boom-bust cycles have undermined the certainty and confidence needed to grow skills and sustain a robust workforce over time. Gains made in peak periods dissipate and the effort to gear up again has taken energy that could have been more usefully applied to supporting innovation and efficiencies.

“Greater confidence and certainty within the construction sector will provide a more stable foundation as we embark on the decade-long KiwiBuild project to deliver an additional 100,000 modest starter homes into the market.”

Other key findings of the report include that Auckland’s new housing will increasingly rely on apartments; this is already being seen in the latest consent data.  For May close to half of Auckland’s consents were for apartment buildings. The upper North Island triangle of Auckland, Waikato and Tauranga sustains non-residential building activity. Wellington experienced the strongest total construction growth in 2017.

The 2018 National Construction Pipeline Report is based on building and construction forecasting by The Building Research Association of New Zealand (BRANZ) and Pacifecon NZ data on non-residential building and infrastructure intentions.

 

MPU

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