Accord Says Strong Pipeline Forecast Shows Industry Can Prepare For Future

The Construction Sector Accord says that forecasts of a strong construction industry pipeline show that the sector can and must prepare for a different future.

The National Construction Pipeline Report 2021 was released today by the Ministry of Business, Innovation and Employment (MBIE). It provides a forward view of national construction value for the six years to December 2026 and shows that while New Zealand’s total construction value decreased by 5.7 percent in 2020 to $42.6b, growth is forecast for the next six years.

“It’s pretty extraordinary to see such strong forecasts in the Pipeline Report. This time last year the predictions were fairly dire, but we now know the sector has built up an incredible head of steam since then, with record building consents. Our worst problems right now are not enough people and materials to do the job,” says Accord Transformation Director Dean Kimpton.

The report shows that despite disruptions from COVID-19, construction activity is forecast to grow, driven largely by the continued strength of the residential sector.

Key projections in the report are that:

• construction activity will grow steadily to about $48.3b in 2024, driven largely by the continued strength of the residential sector
• 265,000 new dwellings are forecast to be consented over the next six years, an average of over 44,000 per year
• non-residential activity is forecast to reach $10.2b in 2025 and $10.3b in 2026
• infrastructure activity is forecast to reach $11.2b in 2026, dominated by transport, water and subdivision projects

Mr Kimpton says the report should give industry confidence to invest and make changes.

“As a sector we need to get ahead of the game. We need to invest in our people and cast a wider, more diverse net on recruiting. We need to up our game on innovation. We need to accept that climate change also means a change in how we build. At the Accord we think this strong pipeline should give the sector confidence about the changes that are needed. The work is there. The investment will be worth it,” he says.

The report is based on building and construction forecasting by the Building Research Association of New Zealand (BRANZ), and Pacifecon NZ Ltd data on researched non-residential building and infrastructure intentions.

Background – the Accord

The Construction Sector Accord is a genuine partnership between industry and government that is working to fix many of the issues and challenges facing the construction sector. Through its three-year Transformation Plan, the Accord is driving behaviour change to lift overall performance and achieve a safer, better skilled and more productive industry and to share good practice across the sector.

Accord COVID-19 response

During 2020 the Accord supported and launched a range of initiatives including developing health and safety protocols to enable the sector to get back to work under Alert Levels 2 and 3, issuing contract variation guidance setting out a consistent government position for contractors facing additional lockdown-related costs, and launching the Rapid Mobilisation Playbook to support agencies to procure construction work speedily and safely.

During 2021 the Accord again responded to COVID-19 with industry collaboration, leadership and urgency:

• The Accord Forum is an invaluable two-way communication channel between industry and government; it comprises up to 60 senior industry figures and officials
• With industry and CHASNZ (Construction Health & Safety NZ) the Accord has developed a Roadmap for the sector in a COVID-19 environment. It’s a set of tools and protocols allowing construction and related activities to continue as New Zealand and our sector move to living and working with COVID-19
• The Accord facilitated provision of 60 MIQ places per month for the construction sector and is now administering them
• The Accord is working with CHASNZ and key DHBs to supporting vaccination efforts in the sector
• ‘Cainan’s story’ video was viewed by 60,000+ on the Accord’s LinkedIn page – from his hospital bed a formerly anti-vaccine construction worker urges people to “get vaxxed”

People development – Skills

The Accord’s People Development work aims to build capability through addressing skills gaps, helping shape the reforms in vocational education, and creating a long-term workforce plan. It includes:

• developing the Construction Skills strategy, which will provide a strategic vision to inform the direction for current and future skills needs in construction.
• supporting the Reform of Vocational Education, including creation of Construction and Infrastructure Centre of Vocational Excellence (ConCOVE) and Waihanga Ara Rau Workforce Development Council
• supporting the Infrastructure Skills Centre pilots initiatives – one completed in Canterbury, one underway in Manawatu

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