Inflation pressure and the increased cost of living have continued to put a squeeze on the building industry, with a growing number of new builds canned or being put on hold.
The slowdown has seen builders and large construction companies fall short of work and have to pick up smaller jobs to stay afloat.
“Two years ago, there was work available for anyone and everyone. It's certainly dried up a little bit,” builder Nick Farrelly told 1News.
“We’re all doing different types of work. I think there's a lot of small jobs that are being done.”
According to Stats NZ, construction has slowed right down.
In the last year there were around 35,000 new dwellings consented – down more than 20% compared to the year ending April 2023.
Wellington is faring the worst, with a 30% drop in new building consents from the previous year. The capital is followed closely by Auckland (down 27%) and Waikato (down 25%). Meanwhile, Canterbury consents are down by 16%.
Commercial builders are also feeling the squeeze.
One of the country’s largest construction companies, Naylor Love, relies on government funding, which is slowing down.
“What we really need for the new government to do is actually give the construction sector some visibility around their pipeline,” CEO Bruno Goedeke said.
“We need to know the amount of work, what is going to be built and when it's going to be built, and then the industry can plan as a whole.”
Farrelly said the slowdown has also created greater competition across the industry.
“You've got big companies that are pricier smaller jobs, and then the companies that were doing medium-sized jobs are all of a sudden just doing one-off bathrooms,” he said.
“There's a lot more players in the renovation market.”
But there is some optimism however, with prices beginning to stabilise.
“We are not seeing the rises anymore in building materials,” Building Industry Federation CEO Julien Leys said.
“With inflation being more under control than it was, and with the demand that is out there – I think within six months, once we get through this winter period, we will be seeing better times.”
Disclaimer: The copyright of this article belongs to the original author. Reposting this article is solely for the purpose of information dissemination and does not constitute any investment advice. If there is any infringement, please contact us immediately. We will make corrections or deletions as necessary. Thank you.
