RLB CRANE INDEX®

The New Zealand construction industry is currently facing significant challenges, reflecting broader economic and policy shifts. Over the past six months, there has been a notable 15.3% net drop in crane usage across the major centres, with Auckland long-term crane numbers falling by 23.5%, which is not surprising given the ongoing issues in the market. A major concern is the lack of project commitment beyond the design stages, a problem that has persisted throughout 2024.

Construction GDP fell by 3.1% in the December 2024 quarter and has been declining since the March 2024 quarter. Throughout 2024, the government reviewed capital works spending across the education, health, and social housing sectors following budget blowout concerns and a high inflationary environment. This review and the halting of many live projects have now resulted in a scarcity of on-site projects and forward pipeline in these areas, with only a handful of long-term cranes operating in New Zealand in these sectors currently. The commercial market has also been affected, with high interest rates and reduced valuations drying up the pipeline over the last two years, which is again seeing limited on-site work replacing the projects now completing.

Auckland’s market appears to be at its lowest point, but with major infrastructure projects such as the City Rail Link and the Central Interceptor nearing completion, a consistent pipeline of major vertical building and horizontal infrastructure projects is required. New data centres of increasing scale continue to be planned in the pipeline, although there has been a noticeable drop in current data centre long-term crane activity from seven to one long-term crane.

There are early signs of recovery with some large roading and water infrastructure projects, but these will take significant time to plan before on-site activity and new cranes are required. Contractors, sub-contractors, and consultants are facing tough times, and the upcoming May 2025 government budget is crucial for the construction industry. This will help shape the 2026 project pipeline and marks the halfway point of the government’s current three-year tenure.

Tier 1 contractors have seen several early contractor involvement (ECI) projects put on hold at the design, consent, or site enabling stages. When surveyed, they have also indicated that few new cranes are expected in their near-future pipeline. Based on these insights, it is anticipated that the construction industry and the future crane index will face further declines in Q3 2025, with a slower forecast project pipeline and limited new consents and work in place.