Executive summary

The building and construction sector is a major contributor to New Zealand's economy:

Real GDP

6.3% | $17.6 Billion (year ended March 2023)

Employment

10.7% | 308,500 workforce (year ended June 2023)

Businesses

13.3% | 80,613 enterprises (as at February 2023)

Sector performance

Following a period of strong post-pandemic growth, the construction sector is experiencing a slowdown due to rising economic uncertainties and softening demand.

• New dwelling consents have returned to more sustainable levels after a period of record-high residential consents in early 2022.

• Investment in infrastructure is expected to drive construction activity, particularly in Cyclone Gabrielle recovery efforts.

• The construction workforce continues to grow but labour shortages persist.

• Economic uncertainty and high construction costs impacted business confidence and growth in 2022. However, business confidence has improved in 2023 as inflationary pressures ease and disruptions diminish

Global innovation trends

The global construction industry is undergoing a rapid transformation driven by innovative building design, technologies and materials.

• New Zealand’s commitment to climate change mitigation aligns with the global movement towards sustainable construction practices, with a shared goal of achieving net zero carbon emissions by 2050.

• Global building design trends increasingly embrace low-carbon, sustainable principles, giving rise to net-zero (operational) carbon, regenerative, passive and biophilic structures.

• Emerging building technologies offer integrated solutions that enhance efficiency, productivity and safety in the construction process.

• A global call to embrace circular economy through reuse, renew and reduce practices is driving a shift towards earth-based, bio-based and low-carbon materials.