Here’s why the construction sector is feeling more confident

Friday, 5 June 2026

Infrastructure investment is great, but converting it into projects on the ground is what will be key to pulling the construction sector out of the doldrums.

That’s the message Master Builders chief executive Ankit Sharma delivered to Government ministers and MPs at his organisation’s annual post-Budget breakfast in Auckland on Friday.

Over recent years the sector has navigated a prolonged downturn and now the conflict in the Middle East has added to the climate of economic uncertainty.

“That uncertainty makes long-term planning more difficult, it delays investment, it slows decision making, and makes it harder for businesses to come into growth,” Sharma said.

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Stats NZ’s latest value of building work figures, out on Thursday, showed that total construction activity in the March quarter was at its lowest level since the end of 2015, according to Infometrics.

At the same time, new Centrix data showed the construction sector continues to see the most company liquidations of any sector, with 780 companies liquidated in the year to May.

Despite the long list of challenges, Sharma was cautiously optimistic for the sector following the Government’s delivery of the Budget at the end of May.

The Budget featured a $7 billion capital investment package, and Sharma said it contained infrastructure commitments that were directly relevant to building and construction.

For the sector, confidence came from certainty, continuity and a clear path from Budget announcements to work on the ground, he said.

“Confidence is built when projects move from announcements to procurement and from procurement to construction. The test now is delivery for businesses.”

The future of the sector would not be determined by the latest budget alone, it would be determined by what the Government and industry did together over the coming years, he said.

“If we can continue investing in people, improving productivity, delivering critical infrastructure, and creating the confidence businesses need to grow, we will create better outcomes, not only for our sector, but for all New Zealanders.”

Finance Minister Nicola Willis was at the event, which is a forum for government and industry to come together to shape practical, long-term solutions on the big issues, and she acknowledged the last few years had not been easy for the sector.

The success of the sector, its productivity, and its impact mattered enormously to New Zealand's future, and the Budget was intended to help strengthen the country’s resilience and encourage growth, she said.

“Growth comes from businesses having the confidence to invest, to hire, to expand, to take on a new market, to take on some more workers, and so your confidence to do those things does depend heavily on underlying policy settings.”

What made the Budget “critically relevant” to the sector was the boost to capital investment and the provision of the funding needed to move into action on planned long-term pipelines of infrastructure development nationwide, she said.

It included investment in regional hospitals, rail upgrades, transport resilience projects, major school redevelopments, defence infrastructure and funding for the building of new social housing.

Willis said the Government had picked projects that were ready to go and continued to work with the sector to lower costs, improve productivity, and reduce the amount spent on procurement and red tape to make infrastructure dollars going further.

It was positive to see that consents were growing, but everyone in the sector knew that what mattered was converting that into real activity, she said.

“We recognize that we as a government play a role, but we're also grateful for the role that you play, because when you make that choice to take a risk and to get on with the project it has a massive ripple effect across the economy.”

That meant the Government was committed to sustained infrastructure investment, better planning settings, and backing the people taking the risks and making the investments, she said.

Hawkins NZ chief executive Craig Treloar said cost pressures and a real lack of certainty around the pipeline had made for a tough few years for the sector, and had left a lot of businesses struggling with workload.

But the Budget’s investment in hospitals, justice facilities, schools and the like would enable businesses to plan, invest and give people opportunities, he said.

“And that’s been the hard thing to do over the last couple of years due to uncertainty around the market, so a Budget like this gives businesses some confidence to push go on projects and employ some people.”

It was actually a good time to build as the lack of activity in the market meant there was good supply chain coverage out there, so there was better, more competitive pricing, and material costs had stabilised, he said.

“Looking ahead, I think we're nearly out of the downturn. There's signs of growth, and with the investment by the government in those key areas, I'm pretty optimistic that things are going to improve this year.”