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The New Zealand Institute of Building (NZIOB) Reflects on 2024 The New Zealand Institute of Building (NZIOB) has its eye on government plans and legislation, and migration changes and skill shortages when reflecting on the state of the construction industry as 2024 ends. The State of the Construction Industry On the nation’s construction industry generally, […]
The New Zealand Institute of Building (NZIOB) has its eye on government plans and legislation, and migration changes and skill shortages when reflecting on the state of the construction industry as 2024 ends.
On the nation’s construction industry generally, NZIOB reported how: “There is currently a downturn in construction activity and immediate gaps in forward work across the industry. This is resulting in some companies having to downsize and restructure. “This forward work shortage has led to spare capacity, increasing unemployment and will lead to skilled workers going offshore. “The commercial industry may still have further reduction in activity and the future will be challenging as companies will have to fight for the available work. “The supply chain is dropping margins to get market share and for the first time the Cordel Construction Cost Index showed a decrease in building costs over the latest quarter. “The residential space is looking slightly more positive with signs of the green shoots of recovery on the horizon. “Domestic Inflation this last quarter was lower than had been predicted and expectations of Interest Rate reductions are increasing. This will help make residential development feasibilities stack up but the timeline for this may still be several months or more away.”
On government plans, NZIOB reported how: “The government aspires to ramp up its work programme and address the so-called Infrastructure Deficit including ambitious new housing targets, but it will take time for construction projects to start and is unlikely these will provide the immediate stimulus the market wants or needs. “The government is looking to the supply chain to help improve efficiency, productivity and to get a better return on its funds spent. “The new Government has initiated numerous reviews and reforms, and this has led to several Agencies stopping or deferring projects. “A number of major projects were cancelled by the government who refused to provide the additional funds being sought. These cancellations and deferrals have added to the gap in work.”
On migration and skills shortages, NZIOB address how: “There is an easing of skilled worker shortages, with a number of projects finishing up across the country. “Seek job advertisements are decreasing significantly and applicants per role increasing. “Headline unemployment is increasing but is still (at 1st Quarter 2024) no higher than it was in the years leading up to 2019. “With fewer opportunities available in the short-term workers may seek overseas opportunities. This also means when work does pick up again, we will be faced with a similar critical skills shortage once again. “Historically there has been a heavy reliance in NZ on migration to fill skills shortages rather than a sustained investment in training and supporting our own population.”
Regulation and legislation affect the industry’s ability to deliver. “The proposed introduction of Building Code remote inspections is expected to ease and speed the Code Compliance process,” NZIOB report. “Health and Safety regulation has been criticised as overly costly and there are proposals to move towards a more risk based rather than prescriptive system in a bid to right size safety measures and costs. “There are plans to allow <60m² residential buildings to be built without the requirement for a Resource or Building Consent. “The Government has also signalled changes to force local councils to zone 30 years’ worth of future development land for development.”
NZIOB provided Builders and Contractors with an overview based on the shared views of the NZIOB’s board members. They note that these views represent current sentiment and anecdotal information as of 27 September, 2024. Statistical trends and reports are often annual or quarterly and we expect these to represent a generally more positive and active sector than we are currently observing.
The New Zealand Institute of Building represents industry professionals involved in the design, documentation, and delivery of construction projects or related fields nationwide. They’re focused on innovation, education, and industry, and helping members connect, belong and give back.
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