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Building Today Chief’s Chat - Feb 2017

2017 is set to be a big year in New Zealand politics. Prime Minister Bill English, who the Registered Master Builders Association hosted at the Constructive conference in Christchurch last year, has just announced the dates for elections — ring mark Saturday, September 23.

I have no doubt that high on the agenda in the lead up to the elections for parties, whatever their politics, will be construction.

This should not be surprising. A PWC report which was jointly commissioned by the Construction Strategy Group, the Construction Industry Council (which I chair) and BRANZ, underlines why building in this country matters.*

The construction sector makes a significant contribution across New Zealand’s economy. In terms of economic activity, it generates the equivalent of 8% of GDP. Over half of New Zealand investment in capital assets was facilitated  through  the  construction sector.

Construction accounts for 10% of jobs in New Zealand. That’s more than 300,000 people in construction or construction-related jobs.

To  put  this  into  perspective,  the  sector employs more people than the primary sector which includes agriculture, fisheries and forestry.

The construction sector also had the highest job growth between 2012 and 2015. This is expected to increase on average by 10% between 2015 and 2021 — equivalent to 49,000 new jobs in construction in the next five years.

Some reports suggest that things are expected to peak in 2017 when the value of national construction hits $37 billion. The sector is highly cyclical so that is not unexpected.

But the demand for building will not go away if Auckland needs 13,000 houses a year for the next 30 years. Other regions are experiencing similar  housing pressures.

It is fair to say that improved productivity and profitability in the sector has a positive multiplier effect across New Zealand’s economy.

But it is about more than just the economy. The industry builds the homes we live in and the places we work in. These are fundamentally important in our every day lives.

Elections, at the best of times, can be unpredictable. All sorts of promises can be made. That is why it is important we, as an association, stay engaged with decision makers.

We have a wealth of knowledge of the sector to draw on to help shape future policy direction so the industry is able to respond meaningfully to New Zealand’s construction and building demands.

David Kelly