Wellington named as a “hot spot” for construction boom

News from Productivity Partnership
New Zealand is on the brink of the biggest construction boom in 40 years, according to a joint industry and government report released today. And the report names Wellington as one of four construction “hot spots.”

The National Construction Pipeline report points to an unprecedented level of building and construction in New Zealand over the next five years.

This report is consistent with The New Zealand Sectors Report 2013 on Construction published on 20 November, but provides new information on the future industry workload including the nature and timing of planned construction activity by type and region.

The report brings together economic forecasts and data from the public and private sectors on their forward construction workload from 2013 to 2018. It shows at least 10 per cent per annum growth for four years, peaking in 2016 when nearly $32 billion of construction activity is predicted.

The report forecasts an increase in construction right across the country in both residential and non-residential sectors. Construction hot spots are Auckland, followed by Canterbury and then Waikato/ Bay of Plenty and Wellington. The main drivers of growth are Auckland’s residential housing demand more than doubling (projected 150 per cent increase) and the Canterbury rebuild.

The National Construction Pipeline report was commissioned by the Building and Construction Productivity Partnership (Productivity Partnership), a joint industry and government body established in 2011 to address barriers to productivity in New Zealand’s building and construction sector. It was prepared by Pacifecon (NZ) Limited in collaboration with BRANZ.

“This is a heads-up to the sector,” says Productivity Partnership spokesperson Andrew Reding. “We want people to be aware that there is an ongoing pipeline of work so they can manage resources appropriately.

“The National Construction Pipeline report is validated by a database of client intentions – projects that we know are going ahead. What’s striking is not just the rate of construction growth, but the duration of that growth. We’re looking at a sustained level of activity over many years. The question for the industry is how are we going to meet that demand without compromising quality?

“New Zealand is a small market and the Productivity Partnership is sharing this information to encourage the demand and supply sides of the industry to work collaboratively. Visibility of forward demand can assist planning, scheduling of investment in skills and plant, and co-ordination of the timing of projects, particularly public works.”

The Productivity Partnership intends to release national construction forecasts on a regular basis.

A fact sheet summarising the National Construction Pipeline report is attached. The full report can be viewed at: http://buildingvalue.co.nz/sites/default/files/National_Construction_Pipeline.pdf

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