While 278,500 Kiwis build the future every day, our construction industry stands as a titan of the economy, yet faces a critical crossroads defined by a profound skills gap, soaring mental health challenges, and a pressing push toward sustainability.
Key Takeaways
- In 2023, the New Zealand construction industry employed 278,500 full-time equivalent workers, accounting for 10.2% of total national employment
- As of June 2023, there were 11,200 construction firms operating in New Zealand, with 98% being small businesses employing fewer than 20 people
- The construction workforce grew by 2.8% year-on-year in 2022, adding 7,600 jobs, primarily in residential building subsector
- Construction GDP contribution was 6.8% or NZ$18.2 billion in year ending March 2023
- Total construction investment reached NZ$52.4 billion in 2022/23 financial year, up 4.1%
- Residential construction expenditure was NZ$28.7 billion in 2023, 55% of total sector spend
- Residential building consents issued for 38,200 dwellings in year ending June 2023, down 22% from peak
- Total value of building consents NZ$39.5 billion in 2022/23, with residential at 62%
- 1,450 new commercial buildings consented in 2023, value NZ$4.2 billion
- Lost time injury frequency rate in construction was 2.8 per 100,000 hours in 2022
- 4,200 notifiable incidents reported in construction in 2023, 22% fall-related
- Construction fatality rate 12 per 100,000 workers in 2022, 3.5x national average
- Carbon emissions from construction 4.2 Mt CO2e in 2022, 8% of national total
- 42% of construction waste recycled in 2023, up from 38% in 2020
- Timber use in construction 2.8 million cubic metres in 2023, 85% sustainably sourced
New Zealand's construction industry faces significant skills shortages despite steady growth and rising wages.
Financial and Economic
- Construction GDP contribution was 6.8% or NZ$18.2 billion in year ending March 2023
- Total construction investment reached NZ$52.4 billion in 2022/23 financial year, up 4.1%
- Residential construction expenditure was NZ$28.7 billion in 2023, 55% of total sector spend
- Non-residential building value-added NZ$9.1 billion, growing 5.2% in 2023
- Infrastructure investment by construction NZ$14.6 billion in 2023, 28% of total
- Construction sector profit margins averaged 4.2% in 2022, down from 5.1% pre-COVID
- Government construction procurement totalled NZ$12.8 billion in 2022/23, 24% of GDP spend
- Average construction firm revenue NZ$4.7 million in 2023, with top 10% over NZ$50m
- Sector debt-to-equity ratio 1.2:1 in 2023, stable despite interest rate hikes
- Export revenue from construction services NZ$1.2 billion in 2022, mainly Pacific projects
- Tax revenue from construction industry NZ$3.9 billion in 2023, including GST and PAYE
- Cost inflation in construction materials 12.5% in 2022, easing to 6.8% in 2023
- R&D spend by construction firms 0.8% of revenue in 2023, below OECD average
- Bankruptcy rate in construction 2.1% in 2023, highest sector at 15% of total insolvencies
- Venture capital investment in construction tech NZ$45 million in 2023, up 30%
- Insurance premiums for construction liability NZ$1.8 billion annually in 2023
- Productivity growth in construction 1.4% per annum 2018-2023, lagging GDP growth
- Capital expenditure by construction firms NZ$2.3 billion in 2023, mainly equipment
Financial and Economic Interpretation
While the sector robustly pours NZ$52 billion into our economy and builds much of our nation, its razor-thin 4.2% profit margins and a troublingly high bankruptcy rate reveal an industry laying its own foundation under immense pressure.
Projects and Output
- Residential building consents issued for 38,200 dwellings in year ending June 2023, down 22% from peak
- Total value of building consents NZ$39.5 billion in 2022/23, with residential at 62%
- 1,450 new commercial buildings consented in 2023, value NZ$4.2 billion
- Infrastructure projects under construction totalled 2,800 km of roads in 2023, cost NZ$8.9 billion
- Auckland housing starts 12,400 units in 2023, 32% of national total
- Multi-unit residential consents up 15% to 9,800 dwellings in 2023
- Hospital construction projects value NZ$2.1 billion ongoing in 2023
- Resource consents for construction 45,200 issued in 2022/23, average processing 65 days
- Earthquake-prone building remediations completed 1,200 in 2023, 18% of target
- New school builds and upgrades NZ$1.4 billion in 2023, 25 projects
- Residential completion rate 35,600 dwellings in 2023, supply shortfall 10,000 units
- Roading construction output 12.5 million tonnes asphalt laid in 2023
- Industrial building consents NZ$3.8 billion in 2023, led by warehouses
- Heritage building restorations 320 projects, NZ$450 million in 2023
- Water infrastructure pipelines laid 450 km in 2023, cost NZ$1.2 billion
- Off-site prefabrication used in 18% of residential projects in 2023, up from 10%
- Total floor area consented 28.5 million sqm in 2023, residential 65%
- Construction work done volume index up 3.2% in Q2 2023
Projects and Output Interpretation
New Zealand's construction industry is wrestling with a dual reality: it's simultaneously pouring billions into ambitious infrastructure and commercial projects while failing to build enough homes, leaving residential consents in retreat and completions lagging so far behind demand that the country is essentially constructing a magnificent new skeleton but forgetting to put enough flesh on the bones.
Safety and Compliance
- Lost time injury frequency rate in construction was 2.8 per 100,000 hours in 2022
- 4,200 notifiable incidents reported in construction in 2023, 22% fall-related
- Construction fatality rate 12 per 100,000 workers in 2022, 3.5x national average
- 65% compliance rate in building consent inspections in 2023
- Asbestos removals in construction sites 2,800 notifications in 2023
- 1,450 improvement notices issued to construction firms in 2023 for safety breaches
- Construction workers' heat stress incidents up 28% to 340 in summer 2023
- 92% of construction sites had safety plans in 2023 audits, up from 85% in 2021
- Noise-induced hearing loss claims 1,200 in construction 2022
- Building warrant of fitness compliance 88% for commercial buildings in 2023
- 720 prosecutions for health and safety breaches in construction 2023, fines NZ$12.5m
- Crane incidents 45 reported in 2023, 12 serious
- Mental health training completed by 45% of construction supervisors in 2023
- Scaffolding collapses 18 incidents in 2023, all non-fatal
- 76% reduction target met for serious harm in construction by 2023 from 2015 baseline
- Fire safety non-compliances 2,100 in construction projects 2023
- Vibration injury claims down 15% to 890 in 2022 due to tool upgrades
- Compliance with seismic standards 94% in new builds 2023
- Drug and alcohol testing positive rate 4.2% on construction sites 2023
Safety and Compliance Interpretation
The New Zealand construction industry is a tale of two sites: one where safety plans and compliance are climbing impressively, and another where the grim reality of falls, fatalities, and fines reminds us that for every step forward, a hazard still waits in the gap.
Sustainability and Materials
- Carbon emissions from construction 4.2 Mt CO2e in 2022, 8% of national total
- 42% of construction waste recycled in 2023, up from 38% in 2020
- Timber use in construction 2.8 million cubic metres in 2023, 85% sustainably sourced
- Low-carbon concrete adopted in 12% of projects in 2023
- Energy-efficient designs in 65% of new residential consents 2023
- Steel recycling rate in construction 92% in 2023, saving 1.2 Mt emissions
- Green building certifications 420 awarded in 2023, Homestar and Green Star
- Water usage in construction reduced 18% to 45 litres per sqm in 2023
- Solar PV installations on construction sites 2,500 systems in 2023, 150 MW capacity
- Embodied carbon reporting mandatory for 25% of public projects in 2023
- Plastic waste from construction 28,000 tonnes recycled in 2023, 55% rate
- Biodiesel use in construction machinery 15% of fuel in 2023
- Native timber planting offset 5,200 ha for construction in 2023
- Prefab modular homes 22% lower emissions than traditional in 2023 lifecycle analysis
- Insulation R-values exceeded code by 20% in 68% new homes 2023
- Construction biodiversity credits traded NZ$12 million in 2023
- Fly ash in concrete replaced 18% cement in 2023, reducing emissions 25%
- Zero-waste sites achieved by 150 construction projects in 2023
Sustainability and Materials Interpretation
New Zealand’s construction industry is finally building more than just structures—it's piecing together a greener future, one metric at a time, though the fact it's still responsible for 8% of the country's emissions proves the foundation is still drying.
Workforce and Employment
- In 2023, the New Zealand construction industry employed 278,500 full-time equivalent workers, accounting for 10.2% of total national employment
- As of June 2023, there were 11,200 construction firms operating in New Zealand, with 98% being small businesses employing fewer than 20 people
- The construction workforce grew by 2.8% year-on-year in 2022, adding 7,600 jobs, primarily in residential building subsector
- Women represented 13.5% of the construction workforce in 2023, up from 12.1% in 2019, with highest growth in administrative roles
- Maori and Pasifika workers made up 22.4% of the construction workforce in 2022, concentrated in labouring occupations at 35%
- Apprenticeships in construction numbered 12,400 in 2023, a 15% increase from 2021, driven by government subsidies
- Average weekly earnings in construction reached NZ$1,450 in Q2 2023, 18% above national average
- 28% of construction workers were aged 50+ in 2023, highlighting skills shortage risks due to ageing workforce
- Site managers in construction earned median NZ$105,000 annually in 2022, with 5.2% annual wage growth
- 4,200 international workers on construction visas in 2023, mainly from UK and India for specialist trades
- Labour turnover rate in construction was 14.5% in 2022, highest among all sectors due to project cyclicality
- 65% of construction firms reported skills shortages in carpentry and engineering in 2023 survey
- Youth employment (15-24) in construction rose to 18,300 in 2023, up 8% from pre-COVID levels
- Construction training providers enrolled 25,600 learners in 2022, with 72% in level 3-4 qualifications
- Self-employed contractors comprised 42% of construction workforce in 2023, averaging NZ$92,000 income
- Regional disparity: Auckland construction employment 92,000 vs Canterbury 45,000 in 2023
- Mental health claims among construction workers were 2.3 times national average in 2022
- 7,100 new construction qualifications awarded in 2023, led by Level 4 certificates
- Female apprentices in construction increased 25% to 1,800 in 2023
- Construction unemployment rate was 3.8% in Q3 2023, below national 4.2%
Workforce and Employment Interpretation
New Zealand's construction industry is a vibrant, slightly creaky engine of small businesses where everyone is earning well above average but still desperately hunting for carpenters, nervously eyeing the retirement countdown of a quarter of its workforce, and trying to build more houses and better mental health support with one hand tied behind its back.
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