Construction to surge ahead

MARTA STEEMAN
Last updated 05:00 11/12/2013

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The biggest building and construction boom in 40 years in New Zealand is kicking off and tipped to peak in 2016 when $32 billion is forecast to be spent in that year, a new report says.

The boom will be mainly fuelled by the construction of houses, units and apartments in Auckland and secondly by the rebuild of Canterbury, the National Construction Pipeline report says.

But other regions like Waikato, Bay of Plenty and Wellington will enjoy noticeable busier construction industries as well.

Building and construction includes not only residential building but also the ultrafast broadband project, roading projects, energy construction, commercial buildings and civil projects such as water and wastewater projects.

Auckland's share of the multibillion-dollar construction boom from 2013 to 2018 will be about a third.

The report does not state Canterbury's share but the graphs show it will enjoy the second largest share of the spending.

The report pulls together known and forecast data to project demand for the next six years.

The aim is to help planning and try to avoid boom and bust cycles.

The report asks whether the industry can meet demand without compromising quality.

The report was commissioned by the Building and Construction Productivity Partnership, a partnership of industry and government, established in 2011 to address low productivity in the construction sector.

The report tips unprecedented demand.

The predicted peak in 2016 at $32b of spending in that year is 23 per cent higher than the last peak in 2007 when over $26b was constructed.

Nationally, the residential building peak is tipped for 2016 and non-residential in 2017.

The report also says the high rates of building construction growth are over a longer period than any time in the last 40 years.

"The challenge for the sector will be how to sustain four or more years of 10 per cent plus growth," the report said.

The total value of work is expected to grow by 44 per cent from 2012 to 2016.

The report says it would be ambitious for the Auckland construction sector to reach and sustain the rate of growth predicted in the report.

In Canterbury, the rebuild is expected to peak in mid 2015 with a strong contraction following. But if the rebuild takes longer or does not peak as high, the contraction may be later, slower or both.

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