NEW ZEALAND construction input costs

Material cost pressures remain relatively subdued

Materials and equipment costs

Material cost pressures in New Zealand remain relatively subdued compared with Australia, reflecting weaker underlying construction demand and softer market conditions. However, global uncertainty continues to present an upside risk to input costs.

Source: Turner & Townsend ANZ market intelligence report H1 2026

Producer price data for Q1 2026 indicates more moderate price movements across most construction materials compared with Australia. Copper-related products, including electrical equipment, have not experienced the same level of price escalation, reflecting weaker domestic demand and lower activity levels. In addition, the absence of a dedicated copper price index means some global price movements are only partially captured within broader material categories.

While material price inflation has remained relatively contained, there is typically a lag between movements in global commodity markets and their transmission into domestic construction costs. Sustained volatility in energy and freight markets is therefore likely to place upward pressure on material and equipment costs later in the year.

Construction labour

Labour availability has improved as construction activity has softened across much of the country. Reduced workloads have eased many of the labour shortages experienced in recent years, increasing the availability of both trades and professional resources. This has improved resourcing conditions for contractors and contributed to a moderation in labour cost escalation.

Source: Turner & Townsend ANZ market intelligence report H1 2026

The softer market environment is now reflected in construction wage growth, which has moderated from elevated levels seen during the post-pandemic recovery period. Current conditions suggest labour capacity is generally sufficient to meet existing workloads across most sectors.

However, labour availability may tighten over the medium term as construction activity recovers. Competition from Australia remains a key risk, particularly given the stronger infrastructure, defence and energy pipelines. Continued demand for skilled workers in Australia, combined with higher relative wage outcomes, may encourage labour migration and reduce the availability of experienced trades and technical professionals within New Zealand.