Construction activity in both the public and private sectors remains subdued. While business sentiment has shown signs of optimism, this has yet to translate into increased private investment. Ongoing reviews of public projects, including school construction, nationwide social housing initiatives, and a comprehensive assessment of healthcare capital expenditures, have created uncertainties about the future pipeline of government projects.

Building cost inflation has eased considerably, returning to pre-pandemic levels of growth. This improvement is attributed to improved supply chain efficiencies and declining material costs, particularly in steel and timber. Additionally, contractors are reducing profit margins to secure available work, further easing cost pressures. This trend is helping to create a more predictable environment for cost planning and project management.

The recent decline in net migration is due to fewer migrant arrivals and a rise in departures, particularly among New Zealand citizens. Despite this decline, the current net migration rate remains relatively high by historical standards. However, the construction industry is experiencing a loss of confidence due to the absence of a clear pipeline of government projects. This situation raises concerns regarding New Zealand's labour pool and the potential risk of losing skilled workers to overseas markets.