The world has changed since we released our last New Zealand construction sector report in August 2021. Inflation and interest rates continuing to rise, and the Reserve Bank is actively pursuing a slowdown in our economy. In addition, climate change has been taking a very real toll on our country and its infrastructure – we will take months and in some cases years to recover from the flooding from Cyclone Gabrielle in February 2023 and other weather events. And these will not be the last natural disasters our country has to overcome.

A two-tiered construction sector

So how does this impact the construction sector? This report features survey responses from construction businesses, with a weighting towards larger scale, commercial entities. Since 2021, the construction sector has proved its resilience. Despite tough economic conditions, most construction businesses have had more work than they can manage – and even now, in this year’s survey results, we are seeing a good level of optimism, with many businesses continuing to manage cash flow and margins well. One respondent’s comments are telling; “We have been through many tough times over the years and are well-positioned both financially (in terms of cash flow and retained earnings) and resource-wise to ride this out.”