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Latest News / Construction is forecast to peak at $43 billion in 2021

Construction is forecast to peak at $43 billion in 2021

Stuff – 3rd September 2019

Construction is forecast to keep growing and peak at $43 billion in 2021 a new Government report says.

Construction is forecast to keep growing and peak at $43 billion in 2021, sooner than forecast a year ago, a new Government report says. 

That will include about $26b of residential building, $9b of non-residential construction and about $8b of infrastructure work at the peak in 2021.

The National Construction Pipeline Report 2019 shows an earlier and higher peak than was forecast in the 2018 report which said total construction was expected to grow steadily to a forecast high of $41.4b in 2023.  

The yearly report, commissioned by the Ministry of Business Innovation and Employment, paints a picture of how much construction work is expected in the next six years.

All up 224,500 new dwellings are forecast to be consented over the next six years, an average of more than 37,000 a year.

Residential building is expected to level out from 2020, but not in Auckland, as well as non-residential building to tail off in 2021.

Building industry training organisation BCITO chief executive Warwick Quinn said the report showed there was still plenty of activity in construction.

The new high of $43b was very high compared to traditional levels some years ago. 

Non-residential building is expected to peak in 2021 at $9b.

Auckland new housing had not kept pace with population growth and the region had a big shortfall following the GFC (Global Financial Crisis). Auckland residential housing was still in massive catch up mode, Quinn said.

The construction sector had big shortages of labour and tradesman "so getting more people into the sector is as important now as it ever has been".

BCITO estimated that 80,000 workers were needed in the construction sector - from sales to administration to trades people - over the next five years and half of those needed to be trade-qualified.

"It's quite encouraging to see these forecasts...by and large a pretty much sustained level of activity for the next five years."