Rider Levett Bucknall’s latest Infrastructure Forecast Report 003, prepared in collaboration with NZIER, highlights a positive outlook for infrastructure investment in New Zealand, despite a period of slower growth and easing cost pressures.
Investment confidence endures
“Infrastructure construction growth has slowed, but the outlook remains positive, particularly across transport and water,” said Ed Cook, Director at RLB. “The building sector is cautiously optimistic that lower interest rates will support a recovery in construction demand.”
Pipeline signals strength
The December 2024 Te Waihanga pipeline snapshot forecasts $204 billion in infrastructure projects, with $107.9 billion already funded. Transport leads with $131.6 billion in planned investment, accounting for more than 60% of all infrastructure spending over the next decade.
Cost pressures easing
Weaker demand has eased civil construction cost pressures. RLB forecasts cost inflation will bottom out at 0.5% by the end of 2025 before rising gradually to 2.6% over the medium term, underpinned by a recovery in demand.
Economic indicators improving
Recent data indicate a 0.7% increase in GDP and stronger retail spending. The RBNZ has begun monetary easing, contributing to improved business confidence — although challenges remain, including a slower population growth outlook.
In summary
While near-term conditions remain subdued, the infrastructure sector continues to present opportunities, particularly in the transport sector. With easing inflation and growing funding certainty, New Zealand remains positioned for resilient long-term infrastructure delivery.
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