Stats NZ data shows the value of work happening in Auckland as at the end of the March quarter was 18% lower than a year earlier. Photo / Greg Bowker
I love a construction boom. It feels like progress.
Unfortunately, Auckland is not having a construction boom. It has the opposite.
It is in the midst of a historic building slump.
While residential building has stabilised in the past year, non-residential (the big stuff) has plunged.
According to the latest building work data from Stats NZ, the value of work happening in Auckland as at the end of the March quarter was 18% lower than a year earlier.
The total building value was $7.2 billion, down 5.9% from the March 2025 quarter.
Residential building wasn’t too bad.
Infometrics chief forecaster Gareth Kiernan notes that the value of new residential work was down only 0.3% from a year ago.
In fact, Auckland was the only region with a lift in the value of residential activity from a year earlier, up 2.1%.
Non-residential building was a shocker, though.
Non-residential activity recorded a 13% decline in volume from a year earlier, which was the largest annual drop since 2010, Kiernan says.
And those numbers are flattered by strength in the South Island – Canterbury was up 8.7%.
The largest falls were recorded in Wellington (-22%) and Auckland (-18%).
As a slogan for the city, “Auckland: Wellington’s still worse” has a certain ring to it.
But the numbers paint a stark picture of what’s missing in the economic mix in both cities.
In total (including residential), Stats NZ figures show the amount of building work being done in Auckland in the first quarter by value was 26% lower than it was at its last peak (Sept 2023).
That puts an enormous hole in Auckland’s economy and the confidence of Aucklanders.
According to a Stats NZ report from March this year, in Auckland, filled jobs in construction were down 3936 compared with the December 2024 quarter – the largest fall of any region.
Auckland has roughly a third of the population, but is taking 60% of the construction job losses.
The optimism about the future that a construction boom creates has been a key ingredient in the Chinese economic revolution of the past 30 years.
That formula has faltered a little in the country in the past few years.
But even with all the talk of a property slump in China, the scale of ongoing construction there is breathtaking by New Zealand standards – in the major cities at least.
This maintains a sense of momentum in the Chinese economy even when consumers are doing it tough.
Experienced developers are used to the boom and bust cycle.
Many have cautiously and cleverly wound down their operations in the past couple of years – the theory being that the bottom of the cycle is the time to start things up again.
Land, labour and materials are relatively cheaper, and you can time the completion of projects for the upswing.
As I have noted before, this will be the third year in a row where a potential economic recovery stalls in the second quarter.
We’re almost through the second quarter of 2026 already, and this is when we’re supposed to be feeling the worst of the Iran War oil shock downturn.
The gloomiest bank economist forecasts see GDP contracting by as much as 0.3% this quarter.
The latest Monetary Policy Statement from the Reserve Bank has the quarter coming in dead flat (0.0%).
But as the Middle East conflict drags on, it feels like the economic impacts may be less of a short, sharp shock than first expected.
That’s not necessarily a good thing.
We might not see the economy slump as markedly as expected, but then we might not get the bounce-back we hoped for either.
It’s been a long time since we could say the economy was humming – especially in Auckland.
There’s a lot of hope that the International Convention Centre and the imminent completion of the City Rail Link (CRL) will lift things in Auckland.
I’m sure they’ll help.
There’s no question the CBD looks better than it has in years.
But the forecasts for low growth with higher inflation and rising interest rates won’t be inspiring developers to accelerate their building plans.
A more stable long-term trajectory for construction in New Zealand would clearly have benefits.
Much has been made of the need for Governments to depoliticise infrastructure planning so we don’t have to stop and restart our projects every six or nine years.
I feel like the personalities in Wellington may be making some progress on this. I hope so.
Meanwhile, if there is a spark of hope in the gloom, it is in residential building.
Population growth is critical to driving residential building.
And the latest consent data, also out last week, showed 39,087 new homes were consented nationally in the year ended April 2026, up 16% compared with the year ended April 2025, according to Stats NZ.
More than half of the annual growth came from multi-unit homes, such as apartments, townhouses, flats, and retirement village units, Stats NZ figures showed.
Of course, consents don’t immediately translate to work getting underway. But the lift suggests some growing optimism in at least one part of the construction sector.
Here’s hoping momentum builds.
Liam Dann is business editor-at-large for the New Zealand Herald. He is a senior writer and columnist, and also presents and produces videos and podcasts. He joined the Herald in 2003.
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