Construction Challenges When Building in New Zealand

The New Zealand construction industry currently faces a complex and challenging landscape. For construction businesses to thrive, they must be cautious and strategic to ensure profitability and sustainability. Newin is here to help by detailing a few critical issues to be aware of during a construction projection.

Continue reading to gain insights into some significant concerns the construction industry is grappling with, including inflation, disruptions in construction activities, and financial hurdles.

Inflationary pressure

New Zealand hasn’t escaped the global inflationary pressures forcing costs upwards. Uncertain final build costs put pressure on the construction industry.

Purchasers and funders are hesitant to accept these risks, meaning more projects are being put on hold or abandoned. Fewer buyers in the marketplace put even more pressure on an already stressed industry. According to construction specialist James MacQueen, this will notably affect the economy.

One of the first steps in mitigating the impact of inflation is closely monitoring estimated costs against actual expenses throughout the project’s lifecycle.

A building cost estimating service like Newin can implement robust cost control measures and conduct regular cost reviews to help identify discrepancies and enable prompt adjustments to keep the budget in check.

Transparent communication with clients regarding inflation-related impacts is essential for maintaining strong relationships and avoiding disputes. Early engagement with clients to discuss potential price escalations, supply chain issues, and alternative solutions can help manage expectations and prevent surprises during the project’s execution.

Quantity Surveyor Lower Hutt Wellington NZ

Construction disruption

The soaring price of building materials, uncertain supply lines, labour costs, and increasing operational expenses are incredibly disruptive to project budgets and timelines. Delays in a project often mean an adjustment to the contract, further impacting the cost of finance and profit margins.

Employing technology to optimise project planning, scheduling, and resource allocation will mitigate the influence of these disruptive forces. To ensure your project’s resilience in an uncertain industry, it is essential to proactively manage your supply chain, assess risks, and plan for contingencies.

Avoiding financial consequences of inflation

In times of significant inflation, construction businesses should focus on monitoring estimated costs versus actual costs, managing cash flow effectively, and finding a balance between retaining their team and minimising margin and overhead erosion due to wage and salary increases.

To mitigate the influence of financial pressure on a project, you should implement comprehensive cost monitoring and control measures—closely track estimated costs against actual expenses throughout the project lifecycle. Remain diligent, and discrepancies will become apparent early on, giving you some leeway in making strategic adjustments.


How to get the most value out of a new home build in New Zealand

With so much uncertainty in the building industry and no sign of it improving any time soon, getting the most value out of a new home build will continue to be a challenge for homeowners.

Construction cost estimators like Newin Building Estimating Services are a professional service provider with extensive experience in the building industry and associated trades. If you are looking to understand the latest building costs in Auckland, reduce your building construction costs and streamline your building project, a building cost estimator can help.


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