Construction in New Zealand - Key Trends and Opportunities to 2024

November 2020 •
51 pages •
Report ID: 3885883 •
Format: PDF

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Construction in New Zealand - Key Trends and Opportunities to 2024

Summary
Prior to the Coronavirus (COVID-19) crisis, the construction industry in New Zealand had been expanding at a healthy rate, growing by 4.6% in real terms in 2019 - up from 4.1% in 2018 - supported by investment in transport infrastructure and commercial and residential projects. However, the disruption caused by COVID-19 containment measures has ended this expansionary trend.

In late March 2020, the government-imposed stage-4 lockdown restrictions in the country, under which only essential construction works were permitted to progress. The temporary disruptions caused by the lockdown restrictions and social distancing measures have heavily weighed on New Zealand’s construction industry, with its value-add plummeting by 28.6% year on year (YoY) in Q2 2020 - sharply down from a decline of 5.2% YoY in the previous quarter.

The analyst expects the construction industry to shrink by 6.2% in real terms this year. However, in order to provide a boost to the economy in general and the construction industry in particular, the government announced plans to fund large shovel-ready infrastructure projects following the withdrawal of the lockdown. Accordingly, in early April, the government announced the formation of the Infrastructure Industry Reference Group (IIRG), comprising a group of industry leaders, and tasked them with identifying public as well as private sector infrastructure projects with a value of NZD10 million (US$5.8 million) or above, which can be started immediately or at the latest within the next six months. As of early July, the IIRG received a total of 1,924 project proposals across 40 sectors, of which the government approved 150 projects worth NZD2.6 billion (US$1.5 billion) in July 2020.

The industry is expected to recover over the remaining part of the forecast period and register an average annual growth of 3.8% between 2021-2024, supported by investments in residential, transport, institutional and renewable energy projects. As part of the COVID-19 Response and Recovery Fund (CRRF), in May 2020, the government allocated NZD3 billion (US$1.7 billion) to fund infrastructure projects across the country. In addition, growth will also be supported by an investment of NZD12 billion (US$7 billion) to build and upgrade road, rail, school, and hospital projects under the New Zealand Upgrade Programme which was launched in December 2019.

This report provides detailed market analysis, information, and insights into New Zealand’s construction industry, including -
- New Zealand’s construction industry’s growth prospects by market, project type and construction activity
- Critical insight into the impact of industry trends and issues, as well as an analysis of key risks and opportunities in New Zealand’s construction industry
- Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline.

Scope
This report provides a comprehensive analysis of the construction industry in New Zealand.

It provides -
- Historical (2015-2019) and forecast (2020-2024) valuations of the construction industry in New Zealand, featuring details of key growth drivers.
- Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector
- Analysis of the mega-project pipeline, including breakdowns by development stage across all sectors, and projected spending on projects in the existing pipeline.
- Listings of major projects, in addition to details of leading contractors and consultants

Reasons to Buy
- Identify and evaluate market opportunities using standardized valuation and forecasting methodologies.
- Assess market growth potential at a micro-level with over 600 time-series data forecasts.
- Understand the latest industry and market trends.
- Formulate and validate strategy using critical and actionable insight.
- Assess business risks, including cost, regulatory and competitive pressures.
- Evaluate competitive risk and success factors.

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