“The National Construction Pipeline report issued today by MBIE shows
infrastructure investment projections down dramatically on those of 2017,
highlighting the problem of uncertainty in the infrastructure sector and
raising serious questions about New Zealand’s ability to service new housing,”
says Stephen Selwood CEO of infrastructure New Zealand.
“BRANZ research shows last year's spending was down 9% on the 2017 projections.
While their research indicates an increase in capital intentions in the near
term, they also show a subsequent drop-off from the beginning of 2021. Putting
the initial bump aside, overall infrastructure capital expenditure is
forecast to flatline over the next five years.
“The Capital Goods
Price Index (CGPI) has been rising at 3 per cent over the past decade,
suggesting there could be even less investment in infrastructure in the early
2020s than there is today – and we already know that we’re well short of where
we need to be.
“Auckland, a city
buckling under the pressure of growth compounded by decades of infrastructure
underinvestment, will, even with major Government investments announced to
date, fall in real terms over the next five years.
“BRANZ projections show
that construction activity is projected to fall everywhere outside of Auckland
over the next couple of years.
“We will not be able to
address homelessness and meet growth with less infrastructure investment. Homes
need pipes, roads and cables and new approaches to infrastructure investment
need to be implemented.
“This is a very timely report and provides a clear signal to Government that it
needs to move up a gear with urgency.
“There are projects in
the pipeline sitting there waiting for signoff, including Mill Rd, Penlink and
the East West Link in Auckland as well as components of Let’s Get Wellington
Moving and major upgrades to the SH2 corridor north of Tauranga among other
state highway projects nationwide.
“These projects are
needed for homes, tourism and regional economic development.
“If the government
chooses not to fund these and other projects itself, it needs to allow private
capital to be deployed to accelerate investment in transport, water and social
infrastructure to support housing and growth,” Selwood says.
A copy of the National
Construction Pipeline can be found here: http://www.mbie.govt.nz/publications-research/research/construction-sector-productivity/national-construction-pipeline-report-2018.pdf
For further information and comment contact
Stephen Selwood on 021 791 209