Optimism In NZ Construction And Infrastructure Sector Hampered By Ongoing Skills Shortage

New Zealand’s construction and infrastructure professionals have reported that 2019 ended on a generally positive note, with the continued influx of public spending challenging existing capacity constraints.

A recently released market survey by the Royal Institution of Chartered Surveyors (RICS) found that the South Island had been particularly buoyed by an increase in public residential works, while the North Island cited a robust increase in public residential and infrastructure works.

RICS’ Q4 2019: New Zealand Construction and Infrastructure Survey is a comprehensive market-led quarterly guide to the trends in the construction and infrastructure market.

RICS Australasia Managing Director, Chris Nicholl, said that respondents in the North Island again continued to report upbeat conditions, signalling an optimistic outlook for the next 12 months.

“Respondents are telling us that workloads overall increased more quickly in the last quarter of last year than in the quarter prior, which is being driven by an upswing in private commercial and residential work,” Mr Nicholl said.

“There are shoots of optimism starting to emerge in the South Island, with the decline in private commercial and residential work slowing and respondents reporting a positive outlook for both infrastructure and non-infrastructure workloads over the coming year.”

RICS Senior Economist, Sean Ellison, said that while respondents at firms of all sizes generally reported similar increases in overall workloads (in net balance terms) during the fourth quarter of 2019, shortages of both skills and labour remain the key constraint for medium and large sized firms.

“The acute skills shortage - particularly quantity surveyors, project managers and skilled tradespeople - in the market across both islands has been one of the defining features of 2019, particularly across the North Island,” Mr Ellison said.

“The market is telling us that this is going to continue to be one of the biggest constraints on activity for 2020, along with the burden of red-tape and regulation and increased competition.”

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