According to the Timetric's Construction Intelligence Centre (CIC), the domestic construction industry will continue to expand in 2016-2020 as New Zealand drives economic growth through investment in infrastructure construction and housing projects.
In fact, from 2011 to 2015, New Zealand's construction output grew at a compound annual rate of 6.60%. CIC forecasts that growth will slow to 6.07% over the next five years, with output increasing from $32.8 billion in 2015 to $44 billion in 2020. Government and private investment will promote the modernization of domestic transportation infrastructure and renewable energy, and population growth will create new demand for residential construction.
Residential construction is expected to remain the largest market in the entire construction industry, accounting for 36.10% of the total output value of the industry in 2020. The expansion of the middle class population and rising disposable income will strongly support the residential construction market. In the forecast period, various affordable housing projects will also contribute to the growth of the market. As a result, Timetric expects the market to grow at a nominal CAGR of around 7.52% and be worth $15.2 billion by 2020.
The second largest market for the construction industry is infrastructure construction, which accounted for 22.7% of the total construction output in 2015. The market is expected to maintain its position during the forecast period, and the government mainly develops domestic infrastructure through PPP. Due to the increase in international passengers, the government has planned to expand the capacity of the airport by 2020, thus promoting the growth of infrastructure construction. It is estimated that the nominal annual compound growth rate of the output value of the market will be around 9.61%, with a value of $10.3 billion by 2020.
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