Turner & Townsend’s latest Australia and New Zealand market insight report finds that construction activity across Australia grew in Q4 2021, driven by a surge in housing and infrastructure projects.
But New Zealand’s industry remained suppressed by covid-19 restrictions over Q3, with total building activity declining by 8.6% year-on-year during the quarter.
Skilled labour shortages and global supply disruptions still constrain both countries’ supply chains and are causing costs to surge.
Global supply chain disruption is continuing to affect projects under construction and in the pipeline. In the 12 months to December, construction costs for non-residential projects increased by 8% in New South Wales, 8.8% in Queensland, and 14.2% in Western Australia, reflecting the challenging market conditions there.
In New Zealand, non-residential activity has been subdued but residential construction surged over 2021, driven by government-led stimulus measures.
“With a massive pipeline of housing projects still yet to break ground, there are concerns over the capacity of the market to complete this work,” Turner & Townsend said.
Australia’s economy performed better than expected in Q3, despite lockdowns in several states and the emergence of the Omicron strain of Covid-19. While the economy contracted by 1.9% in the third quarter the contraction was less than anticipated, the result of strong household consumption across states not subject to lockdowns.
In New Zealand, the economy contracted by 3.7% over Q3, driven by a fall in domestic and international demand.