Source: Chinese Building Industry Association
Tentative signs of recovery celebrated at Parliament event marking 10th anniversary of New Zealand Chinese Building Industry Association.
New Zealand’s construction sector generated $94 billion in revenue in 2025, from $99 billion the year prior, reflecting the broader economic slowdown that has affected construction workers, business owners, and suppliers.
Despite this fall, the 2025 Construction Sector Report from the New Zealand Chinese Building Industry Association (NZCBIA) sees signs of improvement. Residential consents have levelled off, government infrastructure projects are restarting, and falling interest rates are supporting a cautious lift in mortgage activity.
“This year, the sector has continued to face real challenges,” says Frank Xu, President of the NZCBIA. “Activity has slowed, some businesses have stepped back, and uncertainty has tested our resilience. Yet these cycles are not new to us, they are part of the rhythm of construction.
“Behind the numbers, there are real signs of momentum returning,” he says. “After some very difficult years, we are seeing the green shoots of much-needed recovery.”
“We need to invest in people now, before the next wave of activity begins,” says Xu. “Training isn’t just a cost – it’s a competitive advantage. The smartest firms are planning ahead.”
The 2025 NZCBIA Annual Construction Sector Report was launched at Parliament on 19 August.
Prepared by noted economist Shamubeel Eaqub, the report gives key insights into the economic drivers, the structural state, and the future direction of the construction sector, including:
- Despite lingering headwinds, economic forecasts from the RBNZ, Treasury, and range of economists are optimistic that the worst of the recession is over and household spending and tourism will improve over the course of the next three years, with strong growth in 2026 and 2027.
- With 9,800 consented homes in Auckland alone awaiting development, a backlog of delayed or postponed projects is likely to drive renewed activity when market conditions improve.
- The Government is focused on encouraging investment in infrastructure and housing. For example, the National Infrastructure Pipeline shows planned future projects totalling $207 billion across central government, local government and the private sector.
- The sector is stabilising, with the number of active construction enterprises declining only slightly this year, from 82,000 to 81,000, despite rising credit defaults and company liquidations.
- It remains a major employer, with 281,000 people directly employed and a further 247,000 supported through supplier networks, together accounting for 18 percent of jobs in New Zealand.
- Nearly 70 percent of construction sector revenue goes to suppliers, illustrating the sector’s deep reliance on a broad range of industries – from building materials to professional services. Many of these businesses are local and heavily impacted by fluctuations in construction activity.
A Focus on People, Productivity and Training
The workforce is younger and increasingly diverse, particularly in Auckland where Chinese workers make up 12 percent of the construction sector. While still male-dominated, the share of women has edged up slightly in recent years.
Retention remains a significant issue. Nearly 95 percent of hiring is to replace departing staff, with only 6 percent of workers remaining in the same job after five years. Thirty-seven percent of workers in the construction sector have been in their job for less than a year, and this has been the case over a long period of time. High turnover increases recruitment and training costs and undermines productivity gains, as well as creating high accident rates.
Meanwhile, only a third of new hires enter the sector with prior qualifications or experience. This underscores the need for deliberate training strategies, especially as the sector prepares for an eventual upswing. Workers who receive training are significantly more likely to achieve wage growth and contribute to improved business outcomes.
BCITO welcomes report
“The ability of our employers and industries to respond to growth opportunities relies heavily on sufficient levels of skilled professionals across all levels of construction. Industry and Government investment in training now is critical to ensure we have the right numbers of people, with the right skills, in the right trades, at the right time,” says BCITO Director Greg Durkin. “BCITO is committed to working with industry to support economic recovery through effective staff training and development,” he says.
NZCBIA Marks 10 Years
From trade and investment ties with China to safety standards, training, and research, NZCBIA continues to advocate for a strong, future-focused sector. “As we look to the future, construction will be shaped by innovation, diversity, and sustainability,” said Xu. “With the commitment and drive of our members, I’m confident we’re ready to build that future together.”
