Report Reveals Productivity Challenges in Construction Sector; Govt Vows Reforms

Released by the New Zealand Chinese Building Industry Association, the report examines the sector's current state and its impact on the economy.

A new report has highlighted significant and widespread productivity challenges within the construction sector, emphasizing the need for government reforms to make building easier and more affordable. Building and Construction Minister Chris Penk underscored the report’s findings and the government’s commitment to addressing these issues.

Released by the New Zealand Chinese Building Industry Association, the report examines the sector's current state and its impact on the economy. The construction industry, which contributed $99 billion in sales in 2023 and supports 20% of all jobs in New Zealand, faces serious productivity concerns. The report reveals that productivity levels have stagnated since 1985, despite technological advancements over the decades.

Additionally, the report highlights a 50% increase in the time required to build a home since 2013, rising from 13 to 19 months. This prolonged build process has contributed to an unaffordable housing market, with renters now spending nearly 40% of their income on housing.

The report reflects a widespread perception of the construction sector as “expensive,” a sentiment echoed by many New Zealanders. In response, the government is focusing on reforming the building consent system and eliminating unnecessary red tape to streamline the construction process.

Key reforms include:

Removing barriers to the use of overseas building products.

Advancing remote inspections as the default approach to improve efficiency.

Simplifying the process for minor changes to building consents.

Requiring councils to publish building consent processing times quarterly.

Reviewing the earthquake-prone building system to better balance safety, cost, and risk.

Penk expressed gratitude to the New Zealand Chinese Building Industry Association for the report, highlighting its role in reinforcing the government's efforts to improve the sector and ensure more New Zealanders can access quality, affordable homes.