Kennards Hire’s second annual Construction Confidence Check Survey for New Zealand shows a sector shifting from cautious optimism to practical realism.
- 84% of construction leaders are confident in the growth of the construction industry over the next five years, as businesses navigate cost pressures and economic uncertainty.
- 79% agree the New Zealand construction industry has remained stable over the past 12 months.
- Housing demand and private sector investment were cited as key contributors to the sector’s growth (39% each) over the next five years.
WEDNESDAY 12 AUGUST 2026 | Kennards Hire’s second ever New Zealand Construction Confidence Check points to a remarkably resilient sector, having to make some tough, realistic decisions.
The report, 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 the latter. The survey revealed a 9% drop in confidence year-on-year, pointing to practical realities and market pressures around economic uncertainty, rising costs, tighter customer budgets, labour/specialist capability gaps, planning delays and margin instability. Nevertheless, the persevering confidence is undeniable, with a resounding majority of industry leaders (84%) still optimistic about the growth ahead.
“There is an expected shift from cautious optimism to practical realism over the two years of the Construction Confidence Check in New Zealand, especially in the wake of issues like the global fuel crisis and an upcoming General Election,” said Richard White, Kennards Hire New Zealand General Manager.
“Leaders have moved beyond a hopeful stage to look at solutions. Specifically, how they can train and retain staff, deliver cost-effective solutions to labour and logistics, and what's needed to future-proof their businesses. And they’re doing it all while balancing global pressures, national cost-of-living roadblocks and the general uncertainty of an Election year.
“The businesses that remain resilient will be those that can adapt quickly, spend wisely, and keep projects moving despite the pressures around them.”
Confidence remains strong, but the path to growth is more complex
The Construction Confidence Check shows 79% of New Zealand decision-makers believe the industry has been stable over the past 12 months, while 84% are confident it will grow over the next five years.
However, that growth can only be supported by investment, both monetary and regulatory. Some key contributors to industry growth cited were:
- Private sector investment and housing demand (both 39% each)
- Infrastructure investment (38%)
- Sustainability and ESG requirements (37%)
- Government policy and incentives (36%)
- AI and digital technology adoption also ranked closely behind (35%)
Simultaneously, significant market pressures are having to be dealt with. More than half of New Zealand industry decision-makers (55%) cited the impact of economic uncertainty on investment and housing demand as a factor that could contribute to industry decline over the next five years, while 53% cited low margins and financial instability. 47% pointed to planning delays and regulation concerns, and 41% cited labour shortages and workforce constraints. Meanwhile 59% of businesses say they are concerned about insolvency, business closures or employment instability in the construction industry over the next 12 months.
Cost of living remains a key concern over the past 12 months, impacting 98% of respondents. For many, this is flowing directly into customer behaviour and project delivery. For instance, around two thirds of New Zealand decision-makers (60%) said tighter budgets have delayed customer project approvals. This is significantly more of an impact than that experienced by AU counterparts (48%). Additionally, 52% of NZ responders said they have seen reduced customer renovation or project activity while 54% are finding themselves increasingly relying on hiring versus buying equipment.
Smarter project delivery is emerging as a key competitive advantage
While rising costs remain a major concern, the report suggests the industry’s biggest challenge is not necessarily finding work - but delivering it efficiently.
96% of New Zealand decision-makers said project delays or productivity issues are driving additional costs. The leading cause was time spent coordinating multiple suppliers and project managers, cited by 67% of respondents, followed by lack of skilled labour or specialist knowledge (61%), and material shortages or poor-quality materials( 60%), as well as equipment or technology constraints (55%).
In contrast, only half of Australian respondents reported a lack of materials and half cited skilled labour as reasons for delay/reduced productivity – a comparison contributing to the conversation around skilled labour leaving New Zealand for overseas markets.
In response, businesses are looking at more practical ways to cut costs:
- 40% are training and upskilling workers to improve productivity
- 34% are improving project management and delivery as part of their cost-saving strategies, with 28% outsourcing or subcontracting specialised work
- 32% are leasing or hiring equipment instead of purchasing
- 31% are adopting more energy-efficient or sustainable equipment and practices
- 29% are investing in technology or equipment to improve efficiency and productivity
Beyond cost-savings, other interesting strategies to maintain a competitive edge include partnering with suppliers that offer end-to-end project management or project delivery (35%), leaning towards “lower-risk” work (31%), and investing in AI (26%).
This sentiment indicates that businesses are increasingly looking for ways (and partners) to help remove friction, not add to it.
ESG remains central to long-term growth
Alongside immediate cost and delivery pressures, the report shows sustainability is becoming increasingly important to the long-term outlook of the construction industry, with 37% saying sustainability and ESG requirements will contribute most to growth in the industry over the next five years. Nearly all businesses surveyed, 99%, are prioritising ESG initiatives in some form: reducing emissions or net zero, energy efficiency, implementing supplier ESG performance and more. And across Australia and New Zealand, one in three decision-makers (34%) cited supplier ESG performance as a key focus area for their businesses.
Pushing for career support in the face of NZ’s ‘tradie shortage’
Workforce development is also a major focus, as businesses grapple with talent moving overseas, or out of the trades. When asked what improvements would help attract people to construction-based careers, 45% of New Zealand decision-makers cited clearer career pathways and long-term employment opportunities, 43% pointed to expanding the talent pool through diversity and new workforce initiatives, and 38% cited investing in training, apprenticeships and upskilling programmes.
Despite the challenges, the message from the 2026 Construction Confidence Check is clear: New Zealand’s construction leaders still believe in the future of the industry. But they are also being pragmatic about what it will take to get there.
For more information, requests for interviews with a Kennards Hire spokesperson or further data, please contact:
Liz Eassie | elizabetheassie@kennards.com.au | +61 418 673 196