The outlook for the New Zealand construction industry remains subdued following the release of the New Zealand Budget today, according to international property and construction consultants, Davis Langdon.

Davis Langdon’s Senior Economist and Research and Development Manager, Dr Andrew Wilson, said with annual GDP growth forecast at around a steady rate of 3% through 2010 and 2011, together with restrained Government spending initiatives, a strong revival in both residential and non-residential construction appears some way off.

“The spectre of rising interest rates and the impact of the scrapping of property depreciation allowances together with the continued low demand within the commercial and industrial property sectors contribute to declining optimism for significant growth in building output in 2010,” he said.

Dr Wilson said recent statistics point to a stalling of the emerging construction recovery in 2010. 

“Construction costs are expected to be impacted by the increase in the GST, the effect on energy costs of the new emission trading scheme and rising interest rates are all issues of concern,” he said.

“Notwithstanding these impacts, annual growth in tender prices is expected to be around 2% in 2010 with tender markets remaining highly competitive as a consequence of limited construction opportunities.”

Davis Langdon’s New Zealand headquarters is located in Auckland and is managed by Director Chris Sutherland.

For further information, contact Meaghan Jones on +61 3 9933 8800 or email mjones2@davislangdon.com.au