By Pacifecon general manager Trina Farr
At the end of 2024, the always highly anticipated National Construction Pipeline Report was released, the aim of which is to provide awareness of the expected pipeline of construction work.
Commissioned by the Ministry of Business, Innovation and Employment (MBIE) and jointly prepared by BRANZ and Pacifecon (NZ) Ltd, it includes a projection of national building and construction activity for the six years to December 2029.
The report includes national and regional breakdowns of actual and forecast residential building, non-residential building, and infrastructure activity.
It aims to help the industry coordinate construction procurement and support planning, and investment in skills and capital equipment to meet the sector’s future needs.
Summary of key findings:
• The National Construction Pipeline Report 2024 forecasts a short-term decrease in construction activity into this year, before a return to growth from 2026 onwards.
• While total construction activity is expected to decrease from $60.8 billion in 2023 to $55.1 billion in 2025, activity is predicted to trend upwards from 2026 to $63.7 billion in 2029 as the residential sector recovers strength.
• Nationally, new dwelling consents will fall to a low of 30,000 this year and then increase throughout the remainder of the period to 2029. Intentions also remain high for non-residential activity, with commercial buildings dominating non-residential building work.
• Infrastructure activity is forecast to slow slightly, then remain steady year on year, increasing gradually from 2027 to reach $15b in 2029.
• Commercial buildings are expected to make up 46% of non-residential projects and 48% of the total value, with the private sector remaining the largest initiator of non-residential buildings in the coming years. This follows strong growth in non-residential building activity at the national level in 2023, up 9.9% from 2022.
• A solid pipeline of transport, water and other infrastructure projects is also expected over the next two to three years, collectively peaking at $17.3 billion in 2025.
The report also forecasts that residential building activity will decrease to a low of $28.9 billion this year, before rising to $35.3 billion in late 2028, and for almost 200,000 new dwellings to be consented over the next six years, at an average of more than 34,000 dwellings a year.
So how can the report benefit you and your business? It provides awareness of the expected pipeline of construction work to support:
• planning by all participants in the sector,
• scheduling of investment in skills and capital to meet the future needs of the sector, and
• coordination of construction procurement (particularly central and local government) to enable improved scheduling of construction projects.
Improvements in these areas could help moderate the boom-bust cycles that negatively impact productivity, innovation, employment, skill levels and quality in the construction sector.
In this report, construction is split into three activity types:
• Residential building: Detached and multi-unit dwellings.
• Non-residential building: Structures of a building type (vertical) other than residential, including hotels, offices, retail outlets and industrial buildings.
• Infrastructure: Structures of a non-building type (horizontal), such as roads, subdivisions and civil works. Infrastructure projects do not typically require a building consent.
• The full 2024 National Construction Pipeline Report, and summary infographic report, are available to download at:
mkt.pacifecon.co.nz/resources/national-construction-pipeline
While you’re there, you can explore Pacifecon’s extensive library of resources, including a range of free reports on New Zealand’s construction industry.
