The construction industry is one of the biggest employers in Tauranga and Western Bay. Photo / 123rf
A “perfect storm” has Tauranga’s construction industry feeling the pinch, with residential consents down, jobs declining and projects halted – but some see a turnaround on the horizon.
According to figures from New Zealand Certified Builders, residential consents in Tauranga halved from a 2021 peak of 2180 to 1067 in 2024.
In the neighbouring Western Bay of Plenty district, residential consents fell to 608 in 2024, down from 824 the year before.
Infometrics data showed construction was Tauranga’s second-largest employer in 2024, with about 10,300 filled jobs. It was the third biggest for Western Bay, with about 1050 jobs.
Partial data showed that as of June, the number of construction jobs was down 260 in Tauranga and 130 in Western Bay from 2024’s totals.
Residential building consents in Tauranga dropped 22% over the past year, while nationally they increased 1%.
Infometrics chief executive and principal economist Brad Olsen said the construction industry had taken “the biggest hit” in employment.
“For the likes of Tauranga, the job decline in construction is the largest of all industries,” Olsen said.
He said the construction sector was going through a period of consolidation to figure out the “new normal”.
“The big focus will be unlocking more potential housing supply, putting the right infrastructure in, and people are clearly keen to live in the Bay of Plenty.
“So, by enabling that, I think over time we’ll see more stable, more solid levels of construction come through.”
Todd Grey, of Todd Grey Builders in Mount Maunganui, told the Bay of Plenty Times the downturn in activity came down to the current economic environment and job security.
“All that in turn has a flow-on effect into the building industry.
“If there aren’t many people building, then the ones that are, everyone’s fighting for it a bit more.”
Grey said he was also seeing red tape around getting access to land to build on.
“That’s another side to it, the less land available because it’s dearer to buy, [it] all comes together as a perfect storm.”
He said with a smaller team, he hadn’t been hit too hard but was struggling to get certain jobs across the line.
“Everyone’s quite cautious with costs, so it’s about looking forward because we’re on the job for so long we can’t lock in prices as everything has been going up.”
Grey said it was just a case of “hanging in there”.
“We’ve seen these cycles a few times and are just trying to get thorough and be ready when it does take off again.”
Jones Builders Tauranga director Brad Jones also said the key reason behind the construction downturn was a lack of land in the Bay.
“People just don’t have the confidence yet to buy, with the whole industry being so slow.”
Jones said the construction industry was “a big wheel to get going when people don’t have the confidence to spend”.
He said some of the company’s projects had to be put on hold as a result of the slowdown.
“It’s definitely a lot harder to get projects going, with a lot more red tape and requirements that add more costs.”
New Zealand Certified Builders chief executive Malcom Fleming said the construction industry had been challenged over the past two years.
He said a big contributor was the “swathes of projects” put on hold, but the challenge going forward was the reverse.
The Government recently announced the infrastructure pipeline had grown by more than $30 billion over the past quarter, with more than 9200 projects now planned or under way.
Fleming said they were starting to see signs of recovery, with NZCB members reporting a lift in homeowner inquiries.
He said companies that had been forced to downsize would be “scrambling” to find skilled labour to resource a pick-up in building activity.
“For the construction industry to be able to resource this lift in demand, it has been critical that we keep our training pipelines open.”
Building and Construction Industry Training Organisation (BCITO) director Greg Durkin said training volume was down about 25% compared with the peak in 2022.
“This reflects an easing in construction volume over this period.”
The BCITO was committed to working with the industry to support economic recovery through effective staff training and development.
“Training is critical to ensure we have the right numbers of people, with the right skills, in the right trades, at the right time.”
Building and Construction Minister Chris Penk told the Bay of Plenty Times the construction industry had faced pressure from global and domestic economic conditions.
“Rising costs, compounded by regulation, have contributed to low productivity.”
The NZ Chinese Building Industry Association Research Report showed the number of construction enterprises declined by 1000 from a peak of 81,900 in 2024.
“The best way to retain skilled workers and keep them here in New Zealand is to unleash the sector, ensuring projects can get off the ground quickly and jobs are created,” Penk said.
He said the Government was pushing reforms to make building easier and cheaper by cutting red tape and extra costs.
“The industry has welcomed these changes, recognising that they will help builders get on with the job of delivering the infrastructure and affordable homes Kiwis need.”
Kaitlyn Morrell is a multimedia journalist for the Bay of Plenty Times and Rotorua Daily Post. She has lived in the region for several years and studied journalism at Massey University.