The Construction Sector Accord says forecasts of a strong construction industry pipeline show that the sector can and must prepare for a different future.
The National Construction Pipeline Report 2021 was released recently by the Ministry of Business, Innovation and Employment (MBIE).
It provides a forward view of national construction value for the six years to December 2026, and shows that while New Zealand’s total construction value decreased by 5.7% in 2020 to $42.6 billion, growth is forecast for the next six years.
“It’s pretty extraordinary to see such strong forecasts in the Pipeline Report,” Accord transformation director Dean Kimpton says.
“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 says.
The report shows that despite disruptions from Covid-19, construction activity is forecast to grow, driven largely by the continued strength of the residential sector.
Key projections in the report are that:
• construction activity will grow steadily to about $48.3 billion in 2024, driven largely by the continued strength of the residential sector,
• 265,000 new dwellings are forecast to be consented over the next six years, an average of over 44,000 per year,
• non-residential activity is forecast to reach $10.2 billion in 2025 and $10.3 billion in 2026, and
• infrastructure activity is forecast to reach $11.2 billion in 2026, dominated by transport, water and subdivision projects.
Kimpton says the report should give industry confidence to invest and make changes.
“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,” he says.
The report is based on construction forecasting by the Building Research Association of New Zealand (BRANZ), and Pacifecon NZ Ltd data on researched non-residential building and infrastructure intentions.