New Zealand Key Trends and Opportunities to 2020, Construction

The New Zealand construction industry is well aware of the nation-wide growth and immense potential in expansion. This has been related to many of the announced, on-going and new projects. There are number of announced projects which has not been contracted to any party or company just yet and another number of on-going projects that are yet to be finished. Along with new developments and investments, this will boost and further improve the pace and process of the different projects.

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The New Zealand construction industry has been projected to grow over the forecast period from 2016 to 2020. Again, this has to do a lot with the investments in utilities, infrastructure construction, healthcare, education facilities, commercial construction and residential housing projects. The continued increase is also driven by the Thirty-Year New Zealand Infrastructure Plan last year with aims to develop the country's public infrastructure.

The industry's output value increased at a compound annual growth rate of 6.60% during the review period from 2011 to 2015. However, it is expected to be slowed down to 6.07% over the forecast period.

The government is putting out support such as the infrastructure plan and various other plans and funding. There is already plans to invest NZD157.3 billion in infrastructure through the Thirty-Year New Zealand Infrastructure Plan. Government funds are also established to redevelop and improve areas that were affected by earthquakes over the past unfortunate times. The redevelopment plan will have NZD15.2 billion injected to support the redevelopment process by 2018.

Though residential property prices are increasing constantly, the government aims to provide affordable housing to middle- and low-income earners, the government established the Social Housing Reform Program (SHRP). Which last year, November 2015, the government announced that the program will build 1,000 social houses in Auckland by the end of 2018.

The government also plans to increase the share of renewable sources in the country's total energy mix under the Energy Strategy 2011 – 2021. Therefore, the energy and utility construction is expected to benefit from the rise of share in renewable electricity from 80% of the total energy mix in 2015 to 90% by 2025. The capacity of hydro, solar and geothermal power plants will also be increased by 2020 under government plans.

The increased total spending on education and healthcare has risen by 3.0% and will continue to drive growth in the institutional construction market. Industrial construction in Auckland is also now at all-time high since 2007.