NZ civil construction sector faces confidence drop, workforce shortage
The 2025 Construction Industry Survey, now in its ninth edition, compiles feedback from sector professionals and reveals a mixed picture. Of those surveyed, 16 percent reported a positive business outlook - a significant decrease from 50 percent in 2021. Alongside this decline, 42 percent of businesses reported downsizing or laying off staff over the past 12 months, with 73 percent citing a lack of work as the industry's predominant challenge, compared to just 15 percent in 2021.
Despite the difficult operating environment, almost half (47 percent) of civil construction businesses expressed confidence in their ability to withstand and overcome current challenges. Many are responding by investing in new technology and climate-resilient projects with the aim of supporting business growth and meeting community needs.
Government pipeline concerns
Industry leaders point to uncertainty surrounding the project pipeline as a critical factor in declining business confidence. Alan Pollard, Chief Executive at Civil Contractors New Zealand, said: "New Zealand's civil construction industry is facing a confidence crisis where a lack of work, and uncertainty is placing the long-term health of the industry at risk, but there is plenty of hope on the horizon."
The National Infrastructure Pipeline, managed by the New Zealand Infrastructure Commission, currently forecasts projects worth USD $207 billion across central government, local government and private sector contributions. Despite this, Pollard says there is often a gap between forecasted investments and projects reaching the market, with many projects delayed for prolonged periods. He emphasised the need for more transparent communications regarding project opportunities and more stable investment to provide certainty for infrastructure construction workers.
The impact is particularly pronounced for small and medium-sized enterprises (SMEs), which make up 60 percent of the sector. The survey found that 27 percent of SMEs expect their revenues to decrease in 2025, which is three times the number from the 2021 survey.
Pollard continued: "It's never been more important for central and local government to step up with a clearer, more consistent and visible pipeline of infrastructure construction and maintenance work, rather than just announcements. We see this playing a central role in strengthening business confidence, helping to keep skilled workers in the industry, and ensuring we're ready to meet not just today's needs, but also New Zealand's future infrastructure needs."
Skills and workforce challenges
The survey highlights that human resources and skills are a significant issue. Seventy-three percent of respondents reported a lack of available work for contractors, up from only 15 percent in 2021. This environment increases the risk of skilled professionals seeking employment overseas or leaving the sector to maintain income security.
Looking ahead, 85 percent of civil construction professionals believe that clarity around central and local government projects is needed to restore business confidence and financial stability in the sector.
Climate change and infrastructure
Resilience to climate change is another matter raised by respondents. Fifty-eight percent are not confident in New Zealand infrastructure's current ability to withstand climate change. Civil construction professionals are unified in calling for greater investment in resilience infrastructure, such as seawalls and stopbanks, seeing these developments as essential for community safety during flood or fire events.
Role of technology
Technology is increasingly being recognised as a strategy for business efficiency and growth in New Zealand's civil construction sector. More than 40 percent of those surveyed indicated that adopting technology could help improve efficiency and manage ongoing challenges. Over half of business leaders say that mandated technology assists them in securing new work, indicating a shift in how projects are approached.
James French, Construction Industry Specialist ANZ at Teletrac Navman, said: "While confidence in the sector is under pressure, our research with CCNZ clearly shows that businesses that embrace digital tools and connected platforms are positioning themselves to win work and navigate today's industry uncertainty. Technology isn't just a nice-to-have for civil construction businesses – It's become a business imperative. This year's Civil Construction Industry Report revealed that 60 percent of business leaders in the sector say that mandated technology helps them win work, so its clear technology is playing a key role in building a more resilient and competitive civil construction industry."
The annual report by Teletrac Navman and Civil Contractors New Zealand aims to provide data-driven insights to support the sector as it navigates changing market conditions and prepares for future demands. The 2025 survey was based on 172 responses from civil construction professionals gathered between May and June 2025.
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