Industry resilient despite headwinds

New Zealand’s construction sector is shifting from cautious optimism to practical realism, according to Kennards Hire’s second annual Construction Confidence Check survey.

84% of construction leaders are confident in the industry’s growth over the next five years, even as businesses navigate cost pressures and economic uncertainty. 79% agree the sector has remained stable over the past 12 months.

That growth depends on investment, both monetary and regulatory. Key contributors to industry growth cited include private sector investment and housing demand (both 39%), infrastructure investment (38%), sustainability and ESG requirements (37%) and government policy and incentives (36%). AI and digital technology adoption ranked close behind at 35%.

Still, confidence has dropped 9% year-on-year, reflecting practical realities and market pressures around economic uncertainty, rising costs, tighter customer budgets, labour and specialist capability gaps, planning delays and margin instability.

More than half of New Zealand decision-makers (55%) cited economic uncertainty’s impact on investment and housing demand as a factor that could contribute to industry decline over the next five years. 53% cited low margins and financial instability, 47% pointed to planning delays and regulation concerns, and 41% cited labour shortages and workforce constraints.

59% of businesses say they are concerned about insolvency, business closures or employment instability in the construction industry over the next 12 months.

Cost of living remains a key concern, impacting 98% of respondents over the past year. For many, this is flowing directly into customer behaviour and project delivery. 60% of New Zealand decision-makers said tighter budgets have delayed customer project approvals, a notably larger impact than reported by Australian counterparts (48%). 52% have seen reduced customer renovation or project activity, and 54% are increasingly relying on hiring equipment rather than buying it.

“There is an expected shift from cautious optimism to practical realism over the two years of the Construction Confidence Check in New Zealand, especially in the wake of issues like the global fuel crisis and an upcoming general election,” said Richard White, Kennards Hire New Zealand general manager.

“Leaders have moved beyond a hopeful stage to look at solutions. Specifically, how they can train and retain staff, deliver cost-effective solutions to labour and logistics, and what’s needed to future-proof their businesses. And they’re doing it all while balancing global pressures, national cost-of-living roadblocks and the general uncertainty of an election year.

“The businesses that remain resilient will be those that can adapt quickly, spend wisely, and keep projects moving despite the pressures around them.”

The message from the 2026 Construction Confidence Check is clear. New Zealand’s construction leaders still believe in the industry’s future, but they are being pragmatic about what it will take to get there.

The report, published by the trans-Tasman family-owned equipment hire company, surveyed over 600 business leaders and decision-makers across Australia and New Zealand, with more than 200 from New Zealand.