By Julien Leys, CEO, Building Industry Federation of New Zealand
The building supply chain will make or break New Zealand’s infrastructure ambitions.
Aotearoa New Zealand’s first National Infrastructure Plan 2026 (the Plan), published recently, is a starkly sobering read. As a small country, New Zealand spends a lot on infrastructure; but we do not always get value for money. Despite investing around 5.8 per cent of the country’s annual GDP every year over the past two decades, New Zealand ranks near the bottom of the Organisation for Economic Co-operation and Development for efficiency. As the plan highlights, our ‘bang for buck’ is especially weak. At the same time, we face a perfect storm with a $275-billion pipeline of necessary projects in planning and delivery, rising fiscal constraints, and a rapidly aging population that will push health spending higher while the country’s tax base gets ever smaller.
So far, the public debate has focused on whether there will be ‘less money for roads and more for hospitals’, and, as Minister for Infrastructure the Hon. Chris Bishop has noted, the ‘hard truths’ about affordability. But beneath the politics sits a very practical question we all need to think about: Can New Zealand’s building materials and products supply chain – which includes manufacturers, importers, merchants and distributors – help deliver this infrastructure pipeline more efficiently and affordably?
Positively, the answer is a qualified ‘Yes’; however, only if the sector shifts from being a passive price-taker to an active performance partner in New Zealand’s future infrastructure and built environment.
To this end, the Plan makes three points that are critical for the building supply chain.
First, most of the infrastructure New Zealand needs for the next 30 years already exists. Up to 60 cents of every dollar spent will need to go towards renewals and maintenance, rather than new mega projects. That essentially changes current demand patterns. Instead of episodic, historic spikes driven by key projects, we will instead see sustained, repeatable demand for replacement materials such as fittings, structural elements, pipes, roofing systems, cladding, electrical components, and specialist hospital-grade products.
Second, New Zealand is planning more projects than we can realistically fund or deliver. The Plan signals that unfunded mega projects risk crowding out smaller, deliverable, yet nonetheless essential, infrastructure works. This means a more disciplined sequencing of capital works, and potentially fewer boom and bust cycles. A predictable, prioritised pipeline benefits the supply chain if it can be more transparent and credible, and, importantly, can be provided with long-term contractual certainty.
Thus, the third point is that the Plan calls for improved data quality and mandatory participation in the National Infrastructure Pipeline. Better visibility of forward demand is not just good for governance and procurement, and as benchmark for certainty; it is also a vital precondition for manufacturers and importers to invest in additional capacity, tooling, and upskilling workforces.
Consequently, if the public sector lifts its planning discipline to provide certainty, the supply chain will respond with improved frameworks and efficiencies in production, logistics and cost control.
New Zealand is a small, geographically dispersed (and challenging) market, which imports a high percentage of building products, so we are exposed to high logistics costs and global price volatility. For manufacturers, importers, distributors and merchants, that reality will not change anytime soon. But what can change is how risk and efficiency are shared and allocated across the building supply chain. Therefore, the building supply chain can play a pivotal role across several areas.
Product rationalisation
The Plan identifies fragmentation and regulatory complexity as leading contributors to poor value. In practice, this fragmentation often manifests in things like bespoke specifications, designs, and multiple product standards across various agencies and councils.
Manufacturers and merchants can work with central government and building consent authorities to promote standardised specifications, particularly in water, health, and transport renewals. Rationalising product lines reduces inventory complexity, improves scale/buying power and shortens lead-in times. Examples could be standard pipe diameters, valve types, modular plant rooms, and pre-approved cladding systems, which will enable bulk procurement and more predictable inventories.
If 60 per cent of capital spending is going into renewals, then repeatability is the opportunity we have. The supply chain should champion catalogue-based, pre-approved product suites and systems aligned to national standards on key mega projects.
Just-in-time logistics
Moreover, the Plan emphasises better asset management and long-term investment planning. That same logic applies to materials.
Maintenance-heavy infrastructure programmes require availability and consistency. Thus, a delayed mega project makes media headlines, while a delayed hospital roof replacement or updated emergency department quietly drives long-term cost escalation, and, ultimately, also political and taxpayer risk.
Distributors can develop regionally aligned stock strategies based on better forward guidance projections. If hospital investment increases as a share of GDP, then medical-grade HVAC systems, specialist flooring, wall linings, structural framing systems and prefabricated service modules should be positioned accordingly.
Equally, if land transport capital growth changes relative to past trends, inventory exposure to large-scale road expansion materials (everything from bitumen to asphalt and quarry grade materials) may need recalibration for the projected investment in schemes like Roads of National Significance.
Local manufacturing
The COVID-19 pandemic and global supply disruptions exposed the vulnerability of long, thin supply chains. Not surprisingly, the Plan highlights the need for resilience against such future shocks and natural hazards.
New Zealand has a small but vital strategic manufacturing base, especially for high-volume, renewal-intensive products such as pipes, precast elements, reinforcement, modular building systems and fabricated steel. All of these critical materials can mitigate import volatility and currency risk. While New Zealand’s small scale limits full localisation of these materials, targeted onshore capability in critical categories will nonetheless strengthen our delivery certainty.
The government can support this indirectly by providing predictable multi-year funding contracts. In turn, manufacturers can justify capital investment in plant upgrades, automation/technology and workforce training. This is about resilience and cost certainty in a constrained fiscal environment, not just protectionism.
If what ‘good’ looks like is the infrastructure sector becoming more disciplined, resilient and maintenance-focused, then New Zealand must also have an honest conversation about critical materials.
Steel, cement and concrete, engineered timber systems, fibre cement products, and specialist fabricated components are not simply interchangeable building commodities in a small, geographically isolated economy; they are foundational material inputs into every hospital ward, water treatment plant, bridge deck, and transmission upgrade. Treating them purely as lowest-cost building imports ignores the strategic role they play in delivery certainty.
Steel is critical to the New Zealand infrastructure pipeline. For example, structural steel, reinforcing bars, roofing steel and coated products underpin transport renewals, hospital builds, port upgrades, and electricity infrastructure. Fortunately, New Zealand Steel in South Auckland provides much of the country’s domestic capability alongside broader Australasian capacity. This is important because in a $275-billion pipeline environment, a stable base level of domestic steel production offers three advantages:
- supply security during global volatility
- reduced shipping lead times for renewal programmes
- lower exposure to currency swings that amplify project cost escalation.
For bridge strengthening, seismic retrofits, rail upgrades and hospital expansions, reinforcing and structural steel sourced from New Zealand and Australian steel plants enhances delivery certainty. Predictable infrastructure funding also enables manufacturers to continue to invest in decarbonisation and automation, lowering life cycle cost over time.
If 60 per cent of infrastructure capital is shifting towards maintenance and renewal, then concrete becomes even more central to success. Water pipes, culverts, precast beams, hospital foundations, marine works and transport slabs all rely on cement-based systems.
New Zealand has several local producers, such as Fletcher Building’s cement, and concrete operations provide essential base load capacity. Maintaining viable domestic production reduces exposure to offshore supply shocks and ensures availability for emergency works following natural disasters. Procurement frameworks should recognise:
- the value of onshore clinker and cement capability
- the importance of regional precast fabrication
- the opportunity to scale lower-carbon blended cement aligned with decarbonisation goals.
Concrete rarely dominates headlines for its essential contribution to the building supply chain, even with its ongoing commitment to decarbonisation. Yet, we cannot ignore that, by volume, concrete remains one of the largest material inputs in the infrastructure system.
Meanwhile, engineered timber systems such as glulam and laminated veneer timber (LVL) are increasingly also being used in mid-rise hospitals, education facilities and community infrastructure. They offer construction speed, prefabrication efficiency and embodied carbon advantages over concrete.
New Zealand manufacturers such as Red Stag Timber, and other domestic LVL producers and importers like LumberBank NZ, have developed internationally competitive engineered timber capacity and supply chains. As New Zealand’s health and social infrastructure investment grows, modular timber structural systems can shorten build times, reduce onsite labour requirements and support domestic forestry value chains.
Strategic specification of engineered timber in appropriate building facilities keeps more value in New Zealand while lifting productivity through offsite manufacture.
Additionally, hospitals, schools and public buildings rely heavily on specialist linings, facade systems and fire-rated assemblies. Companies such as Laminex, James Hardie and CSR operate substantial trans-Tasman manufacturing capacity in fibre cement and lightweight systems. This is important, as the move to maintenance-heavy programmes (roof replacements, recladding and seismic strengthening) require repeat-purchase, renewal-driven inputs. Aligning procurement with New Zealand and Australian production reduces freight risk and improves turnaround for time-sensitive public works.
Beyond base-building materials is New Zealand’s equally essential national fabrication capability, including fabricated steel assemblies, precast bridge beams, modular service risers, pipe manifolds and switchboard housings.
Procurement models that allow early engagement with domestic fabricators improve constructability, reduce redesign and cut waste. A predictable pipeline will give New Zealand firms confidence to invest in robotics, CNC machinery and digital fabrication – directly addressing the productivity gap identified in the Infrastructure Plan.
New Zealand’s infrastructure efficiency gap is not purely about funding; it is also about how projects are delivered. The supply chain can help close that gap through embracing more modern methods of construction, such as prefabrication, modular assemblies, pre-plumbed riser systems and offsite-manufactured structural components, which all reduce onsite labour costs and supply chain risk. For hospitals and education projects where demographic shifts drive targeted investment, modular design can reduce timelines and life cycle costs.
New Zealand’s building manufacturers should position themselves not merely as material suppliers, but as systems providers. Distributors can aggregate and bundle these systems for contractors, improving coordination and reducing waste.
Perhaps the most profound cultural shift in the Plan is the prioritisation of maintenance and renewals over ‘new and shiny’ projects. This aligns strongly with the interests of the building supply chain.
Maintenance-driven demand is more stable than mega-capital spikes. It supports sustained production runs, workforce continuity and incremental product innovation; however, maintenance budgets are often the first to be squeezed. The Plan’s call for legislative requirements for long-term asset management plans should give suppliers greater confidence that renewals spending will not be put on hold or perpetually deferred.
In response, the supply chain must demonstrate value not only at purchase price, but also across life cycle performance. Products that extend asset life, reduce water loss, improve energy efficiency or simplify replacement cycles align with the Plan’s whole-of-life thinking.
The Plan underscores tightening affordability constraints for households and rising fiscal pressure. Infrastructure ultimately flows through to rates, taxes and user charges.
If material price escalation outpaces productivity gains, the burden lands on communities. The supply chain, therefore, has a social and commercial role: to pursue operational efficiency, transparent pricing and collaborative procurement models.
Long-term framework agreements, volume-based pricing tied to pipeline visibility, and shared savings mechanisms can reduce adversarial contracting and price volatility.
New Zealand cannot afford to build its way out of every infrastructure challenge. Nor can it afford a fragmented, reactive building materials market that increases cost volatility.
The Plan sets a direction: disciplined planning, maintenance first, prioritised mega projects and improved system oversight. If these reforms take hold, they create a more stable and transparent environment for the New Zealand building materials and products supply chain.
In return, the supply chain must step up through standardising, innovating, and investing in domestic and Australasian critical material capability, and embedding productivity into every link – from manufacturer to merchant, and to site.
Infrastructure may be about bridges, roads, schools and hospitals; but, ultimately, it is also about services. These services depend on critical building materials arriving at the right place, at the right time, at the right cost.
In a fiscally constrained era, the quiet efficiency and strategic capability of the building supply chain may prove to be one of the most powerful levers New Zealand has to turn infrastructure ambition into affordable reality.
About the author
Julien Leys has extensive experience working with Australasian clients across the building and construction, and infrastructure sectors. He has advised building and construction clients on government affairs, and on managing issues and crises with strategic communications. Leys was a Ministerial Adviser in the Rt. Hon. Jim Bolger–led Coalition Government (1994/1995) and later held senior roles in key communications agencies, including award-winning agency JML Communications, which was established in 2005 and, more recently, Pendulum Strategies, a New Zealand affiliate for Burson. Leys has led the Building Industry Federation of New Zealand as Chief Executive since 2019.