Following the Omicron outbreak and peak earlier in 2022, construction has continued apace, even in the face of on-site labour resource constraints and continued supply chain disruptions.
According to the release of the Q3 2022 Rider Levett Bucknall (RLB) Crane Index, the residential sector continues to power the construction industry, with a record 77 cranes currently being used on sites around New Zealand.
This includes a record 59 residential cranes in Auckland, with a further seven aged care cranes in Auckland in this new category.
New Zealand currently has 148 long-term cranes on residential and commercial construction sites across the seven main centres — 104 cranes in Auckland, 12 in Wellington, 10 in Christchurch, eight in Queenstown, five in Tauranga, five in Dunedin and four in Hamilton.
Construction activity proves highly resilient
RLB’s Chris Haines says the resilience in construction throughout 2021 and 2022 remains strong, with significant activity across most sectors.
“New Zealand’s construction activity has continued to prove highly resilient, as the value of work put in place over the year to June 2022 stands at $30.9 billion, up 12.4% over 2021,” Haines says.
“The strength of the residential sector has continued into the year to June 2022, with a 14.5% lift in activity, while the non-residential sector increased by 8.1%.
“Our housing market may have pulled back throughout 2022 in sales volumes and prices following the record increases seen in 2021, but the record residential crane numbers in the current count are for long-term cranes on projects that have been planned and funded in 2021.
“Looking forward, whilst the Aged Care, Build to Rent and Kainga Ora pipeline is strong, the residential development pipeline is weaker into 2023, and we are potentially seeing a lag in the change to crane numbers on residential construction sites.”
Building consents up despite economic environment
Overall, the pipeline of construction work to start has remained remarkably resilient, despite the current economic environment.
Building consents for the 12 months to June 2022 totalled $31.5 billion, up 18.5% over the $26.5 billion figure recorded in the year to June 2021.
According to the Index, whilst crane numbers are down slightly for the three largest regions of Auckland, Christchurch and Wellington, smaller regions have either seen a net increase in crane activity, or at least have remained the same, with a significant movement seen in Dunedin (from one to five cranes).
Cost escalation and labour resources still biggest issues
“While long-term crane numbers in Auckland fell from 108 to 104, current figures are still the second highest on record in the biggest construction market in the country,” Haines says.
“Continued cost escalation and labour resources are the two biggest issues facing the industry, and it will be interesting to see how the residential sector performs in 2023, and whether pull back in demand and new projects can help the non-residential sectors in terms of labour, pricing and affordability into next year.
“The number of residential long-term cranes increased to a new record high of 59 cranes. Ten cranes were removed from developments which was offset by an additional 13 new long-term cranes. In contrast, non-residential cranes decreased by a net total of seven.”
Auckland cranes shifting to suburbs
In Auckland, the shift in cranes outwards has continued, with most new residential cranes being located in the suburbs. Residential cranes now account for 57% of all long-term cranes across the city.
This includes new cranes on private residential developments, Build to Rent and Kainga Ora sites. Auckland has a further six cranes in the aged care sector, now reported separately.
Despite the minor overall decrease in long-term crane numbers, the level of building work put in place for the 12 months to June 2022 has, in fact, increased by 11%, to an annual result of $12.2 billion.
The level of residential building work has contributed significantly to the increase in building work put in place, while non-residential activity grew by a comparatively minor proportion.
Decrease in non-residential cranes due to civil sector
With residential cranes up by a net value of five, 77 long-term cranes are currently up and active, representing just over half of all cranes counted.
The decrease in the non-residential cranes is mostly attributed to the civil sector, and roading and bridge projects, seeing a net decrease of six cranes, while the data centre and recreational sectors saw a decrease of three cranes each.
However, offsetting these falls was a pick-up in the health sector, where the number of cranes increased from two to six. Aged care cranes remained steady at seven.
