The Te Ara Tupua cycle path and walkway under construction in Wellington. Photo: RNZ / REECE BAKER
An infrastructure industry report says development is being held back by uncertain funding and a lengthy and costly resource consent process.
The 2025 Infrastructure and Buildings Survey by infrastructure consulting firm AECOM highlights ongoing challenges in infrastructure financing, project delivery, and climate resilience, while the buildings sector remains pessimistic about workload and investment levels, with sentiment at its lowest level yet.
Infrastructure construction industries are cautiously optimistic about the outlook, while those in the buildings sectors see further contraction on the horizon.
"We've climbed out of the 2024 slump, but we're not kidding ourselves," the report said.
"There are some serious gaps between what we want to build and what we can actually deliver.
"And every three years the political goalposts move."
AECOM New Zealand managing director Craig Davidson said the industry needed a believable pipeline of work, along with certainty on funding and improvements to the resource consenting process.
He said the current consent process was unnecessarily lengthy and costly, particularly where energy development was concerned.
The survey indicated overall industry pessimism halved with fewer than 10 percent of respondents expecting to see a decline on spending.
Still, only 20 percent had confidence in government financing mechanisms, while 50 percent lacked confidence in alternative funding, such as public private partnerships (PPPs) and other equity investments.
Uncertain funding was also associated with a persistent shortage of skilled people and a loss of talent to overseas markets, which were cited as the biggest risks to development.
"If you have that certainty, you can invest staff you can invest in staff development," Davidson said.
"Our industry in particular has lost close to 10 to 15 percent of workers over the past 18 months."
The Te Kaha stadium being constructed in Christchurch. Photo: Christchurch City Council
While fewer projects were being cancelled, the report said industries continued to struggle with a shortage of skilled people.
Davidson said it was difficult to get staff to return to New Zealand when demand picked up.
"So what we what we need is to avoid that boom, bust cycle."
He said there needed to be more awareness about how debt-funded investment in infrastructure offered a proven return on investment over the long-term.
"Debt funding infrastructure projects will unblock the efficiency of the pipeline and get New Zealand moving," Davidson said.
The report also identified regional variations in the overall outlook, with Auckland and Wellington sentiment relatively strong, with investment in healthcare and education driving confidence.
The industry was more positive when it came to investment in technology.
About 60 percent of respondents expected to spend more on digital tools, with an increasing focus on the development of smart buildings.
Climate change and extreme weather events were a concern for 80 percent of respondents, with natural disaster preparedness topping investment planning priorities, though the transition to low-carbon was given the lowest planning priority.
Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
