(openPR) Summary
The pace of expansion in New Zealands construction industry slowed in 2017 and 2018, as investment growth was undermined by weak investor confidence as a result of a shortage of a skilled workforce, high wages and a lower profit margin. The industrys growth will pick up pace in 2019, in part supported by government plans to boost infrastructure spending.
In real terms, New Zealands construction industrys output grew at a compound annual growth rate (CAGR) of 4.85% during the review period (2014-2018). Although output growth slowed in 2017 and 2018, the general upward trend can be attributed to public and private sector investment in residential and transport infrastructure projects. Under the National Land Transport Programme, the government invested NZD13.9 billion (US$9.7 billion) to develop the countrys overall transport infrastructure during 2015-2018.
Industry growth over the forecast period (2019-2023) will be supported by public and private sector investments in transport, institutional and residential construction projects. In September 2018, the government announced plans to invest NZD16.9 billion (US$11.2 billion) on the development of the countrys overall transport infrastructure over the next three years; of the total, NZD5.3 billion (US$7.7 billion) will be spent on improving state and highways roads. The governments effort to balance the demand and supply of affordable residential buildings for first-time buyers is also expected to attract investments in the residential market. Under the KiwiBuild program, the government aims to construct 100,000 affordable homes across the country by 2028, of which 50,000 will be built in Auckland. Moreover, an increase in the number of residential building permits issued is expected to support new construction activity over the forecast period.
The industrys output value in real terms is expected to rise at a CAGR of 3.57% over the forecast period.
Key Highlights
The residential construction market to retain its leading position over the forecast-period and account for 43.8% of the total value in 2023, driven by the government efforts to balance housing demand and supply through the construction of affordable housing units. In the 2019 budget, the government announced plans to invest NZD197 million (US$136.1 million) to construct 2,700 housing units by 2023 under the Housing First Programme.
- In May 2019, the government announced that it increased the 2019 budget by 8.8%, going from NZD102 billion (US$70.4 billion) in 2018 to NZD111 billion (US$75 billion) in 2019. Of the total budget, it allocated NZD19.9 billion (US$13.4 billion) to the Ministry of Health, NZD16.1 billion (US$16.1 billion) to the Ministry of Education, NZD5.8 billion (US$3.9 billion) to the Ministry of Transport and NZD2.2 billion (US$1.5 billion) to the Ministry of Housing and Urban Development.
The infrastructure construction market to post a forecast-period CAGR of 3.89% in nominal terms, driven by the governments plan to develop the countrys transport infrastructure. In September 2018, the government announced plans to spend NZD16.9 billion (US$11.7 billion) to develop the country road transport infrastructure under the National Land Transport Program during the period of 2019-2021.
- Forecast-period growth in the energy and utilities construction market will be driven by the governments efforts to develop the telecommunication infrastructure in order to improve broadband and mobile coverage in the rural and remote locations of the country. In December 2018, the government announced the expansion of the Rural Broadband Initiative Phase 2 (RBI2) and Mobile Blackspot Fund (MBSF) program, through which it plans to extend broadband and mobile coverage to 99.8% of the population by 2022.
- The total construction project pipeline in New Zealand - as tracked by GlobalData, and including all mega projects with a value above US$25 million - stands at NZD73.1 billion (US$50.5 billion). The pipeline, which includes all projects from pre-planning to execution, is skewed towards late-stage projects, with 66.7% of the pipeline value being in projects in the pre-execution and execution stages as of July 2019.
Scope
This report provides a comprehensive analysis of the construction industry in New Zealand. It provides -
- Historical (2014-2018) and forecast (2019-2023) 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 GlobalDatas 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 GlobalDatas critical and actionable insight.
- Assess business risks, including cost, regulatory and competitive pressures.
View Full Report Here: https://www.aarkstore.com/construction/1690512/construction-in-new-zealand-key-trends-and-opportunities
