Concrete NZ predicts growth in construction sector as NZ rebuilds in wake of Cyclone Gabrielle

Demand for concrete is expected to continue well into 2023 and 2024, particularly for infrastructure and non-residential construction projects in Northland, Auckland, Tairāwhiti Gisborne, and Hawke’s Bay, says Concrete NZ.

Ready-mixed concrete production, a practical marker of construction and infrastructure activity and general economic health, had already increased 1.5 per cent in the December 2022 quarter on the September 2022 quarter.

Rob Gaimster, Concrete NZ’s CEO says the year-on-year comparison for the December 2022 quarter reflects a “catching up” on the Covid-19 Delta lockdowns in late 2021.

“While the final quarter of 2021 stood out in terms of production, a comparison of volumes in the year to December 2021 versus the year to December 2022 shows production actually rose by 3 per cent in the year to December 2022,” he says.

Gaimster says as Aotearoa New Zealand considers the resilience of its national built environment in the wake of a month of extreme weather events, he anticipates that the durability, strength, seismic performance, fire resistance, and storm water management properties of concrete will result in increased usage across the board.

While forecasting from the Ministry of Business, Innovation and Employment (MBIE), BRANZ, and Pacifecon released in July of 2022 predicts a flattening in residential construction activity, Gaimster says planned reforms to the Resource Management Act, combined with increased activity following Cyclone Gabrielle, could potentially alleviate any easing and increase the likelihood of higher residential building consents, or create an equilibrium.

“The industry will be watching very closely to see how the situation evolves. We are aware that the Government is already taking steps to foster greater activity in the residential construction sector. This grows sector confidence as we prepare to weather the Reserve Bank’s predictions of a “shallow recession” in 2023.

“We also know that activity in the non-residential and infrastructure sectors is expected to see an increase, and given the significant impact of Cyclone Gabrielle, it is likely we will see further growth in the infrastructure sector as rebuild and rehabilitation works come online.”

Gaimster highlighted that commercial consents were predicted to continue at record levels over the next two years, while the total value of infrastructure projects was anticipated to increase, even without modelling to factor in works related to Cyclone Gabrielle.

“The total value of infrastructure projects in the National Infrastructure Pipeline increased from $72.2 billion to $76.9 billion in November 2022, a 6.5% increase when compared with the June quarter.

“This growth is encouraging for the construction sector as a whole, but also supports wider economic stability and wellbeing as infrastructure drives higher living standards, strengthens the economy, and results in better social and environmental outcomes.

“Pleasingly, we anticipate that this will include increased uptake of the industry’s decarbonised concrete products.”

Rob Gaimster says that the concrete sector is making efforts to reduce its climate impact, with a range of new ‘low carbon’ concretes coming online that were already planned for projects, such as the Kāinga Ora Bader Ventura development in Māngere.

“Between 2005 and 2018, the concrete sector has already reduced its emissions from cement by 15 per cent. Our objective is to achieve a target of a 30 per cent reduction in carbon dioxide emissions by 2030, and we are on the cusp of releasing our industry roadmap to be net carbon zero by 2050,” he says.

“In addition to concrete’s qualities as a construction material our industry has a number of initiatives in place that will help to decarbonise concrete, and the concrete sector.

“This includes replacing clinker in cement with low carbon natural and recycled alternatives, increasing design efficiencies in the construction of concrete structures, and finding coal replacements for cement manufacture at Golden Bay’s Portland cement works,” he says.

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