Smarter construction delivery is the real competitive edge

New Zealand’s construction sector is facing rising costs, and much of the pressure is coming from how work gets delivered rather than how much of it there is. According to new research from Kennards Hire, businesses are increasingly focused on efficiency and coordination as the path to managing that pressure.

The report found 96% of New Zealand decision-makers say project delays or productivity issues are driving up costs. The top cause, cited by 67% of respondents, is time lost coordinating multiple suppliers and project managers. Lack of skilled labour or specialist knowledge followed at 61%, material shortages or poor-quality materials at 60%, and equipment or technology constraints at 55%.

The picture looks different across the Tasman. Only half of Australian respondents pointed to material shortages, and half cited skilled labour as a factor in delays, a gap that feeds into the wider conversation about skilled workers leaving New Zealand for overseas opportunities.

To manage rising costs, businesses are turning to practical measures. 40% are training and upskilling their workforce to lift productivity. 34% are improving project management and delivery processes, and 28% are outsourcing or subcontracting specialised work. 32% are leasing or hiring equipment rather than buying, 31% are shifting to more energy-efficient or sustainable practices, and 29% are investing in technology to boost efficiency.

Beyond cutting costs, businesses are looking further ahead. 35% are partnering with suppliers that offer end-to-end project management, 31% are favouring lower-risk work, and 26% are investing in AI. The pattern points to an industry actively seeking ways, and partners, to reduce friction rather than add to it.

Sustainability is also shaping the industry’s long-term direction. 37% of respondents say sustainability and ESG requirements will contribute most to industry growth over the next five years. Nearly all businesses surveyed, 99%, are prioritising ESG initiatives in some form, from reducing emissions and improving energy efficiency to lifting supplier ESG performance. Across Australia and New Zealand, one in three decision-makers (34%) named supplier ESG performance as a key focus area.

Workforce development remains just as pressing, as the sector contends with talent moving overseas or leaving trades altogether. Asked what would help attract people into construction careers, 45% of New Zealand decision-makers pointed to clearer career pathways and long-term employment opportunities. 43% cited expanding the talent pool through diversity and new workforce initiatives, and 38% called for greater investment in training, apprenticeships and upskilling programmes.

Construction’s next chapter in New Zealand looks less about chasing more work and more about working smarter, greener and with a stronger pipeline of skilled people behind it.

The report, Kennards Hire’s second annual Construction Confidence Check survey, published by the trans-Tasman family-owned equipment hire company, surveyed over 600 business leaders and decision-makers across Australia and New Zealand, with more than 200 from New Zealand.