Content provided by Engineering NZ

With complex challenges and flickers of progress, urgency is needed to support the infrastructure sector.

Aotearoa New Zealand is at a crossroads. The current slowdown in the infrastructure sector isn’t just about tight budgets or delayed projects – it reflects deeper, systemic issues: boom and bust investment cycles, a lack of bipartisan support, skills shortages, poor planning, outdated procurement models and clunky regulatory frameworks.

Yes, there are positive signs of change; but without bold, coordinated action, the gap between what the country needs and what the industry can deliver will only grow – and we risk being right back here again, facing the same crisis.

A slowdown with real consequences

Over 18 months, both central and local government infrastructure work has halted, stalled or even been cancelled. While there have been announcements, much of the promised work is still not reaching the market. The lag between when work is promised and when contracts are awarded, or when funds are released, has caused a very real decline in jobs and economic value in the infrastructure sector.

In the June 2025 quarter, construction (including engineering) lost 2315 jobs, a drop of about 1.3 per cent over the quarter. Over a full year, construction employment is down six per cent compared with June 2024 – about 12,169 fewer filled roles.

At the same time, the value of building work put in place has also fallen – in the June 2025 quarter, it was $7.8 billion, down 8.5 per cent from the same quarter in 2024. Residential building work by value is down nearly 9.1 per cent.

These numbers are more than just statistics; they translate to lost jobs, underutilised capacity and weakening confidence.

The loss of jobs and the migration of skilled workers overseas is only going to exacerbate the long-term skills shortage that we were already facing. Before the slowdown, we were already needing about 2300 new engineers per year – a gap that’s getting worse. In addition to the loss of skilled employees, graduates entering the profession are struggling to find jobs. This is causing them to move into other careers or head offshore. When the work builds, it will be hard to bring them back.

The concern is that we are repeating history: losing specialist skills that are hard to rebuild, as was seen in the early 2000s. Without a stable flow of work and strong incentives to stay in New Zealand, the engineering profession is under threat. And without enough engineers, we can’t address our infrastructure deficit and drive innovation-led economic growth.

Addressing the infrastructure delays exacerbating these issues isn’t just about focusing on funding. Poorly aligned standards, unclear planning rules, complicated procurement requirements and slow decision-making are making the lead‑up to projects prohibitively inefficient.

Some flickers of progress

Despite the real challenges, there are positive signs emerging. The draft National Infrastructure Plan released by Te Waihanga (the New Zealand Infrastructure Commission) is cause for optimism. It sets out a longer-term view, with infrastructure expectations and priorities mapped out. Crucially, it explicitly acknowledges the workforce challenges (both short-term and long-term) and the damage caused by short-term reactive planning.

In addition to this, some agencies are pushing forward and making efforts to support the sector. For example, NZ Transport Agency Waka Kotahi has made efforts to accelerate projects, particularly in maintenance and preparatory (preworks) phases for Roads of National Significance. Procurement preparation is being aligned more closely with business case processes so that once investment decisions are made, tendering and delivery can follow without unnecessary delay.

Recently, the government has made a commitment to greater transparency, which is encouraging. Ministers have requested that Treasury report quarterly on actual versus planned expenditure, time to market, and time to enter delivery – something Engineering New Zealand has been advocating for. Such visibility will help keep agencies accountable and keep infrastructure commitments on schedule.

Good regulatory reform could remove key barriers to infrastructure planning and delivery. Changes to the Resource Management Act, the Building Act and the standards system are intended to reduce red tape, improve consistency, speed up consents, and ensure better alignment across regions and projects.

Looking ahead: balancing promise with realism

There is a sizeable infrastructure pipeline: according to the latest National Infrastructure Pipeline, the value of infrastructure initiatives underway or planned is well over $200 billion, with more than half (over $100–110 billion) having some level of confirmed funding. That shows there is ambition; but ambition without delivery is just wishful thinking.

The risk of inaction is high. Infrastructure underpins health, wellbeing, economic growth, climate resilience and equity. Delays or shortfalls in delivery hit communities, especially outside the main centres, and amplify inequalities.

To meet the needs of hospitals, schools, water infrastructure, roads, and rail – and to adapt to climate change, natural hazards, and population growth – New Zealand must increase both the consistency and predictability of investment. We must avoid politicising the infrastructure pipeline and policy flip-flopping. We must also avoid letting approvals bottlenecks undermine progress, and ensure that the workforce is supported, not only by rhetoric but by stable career prospects.

Here are key areas where change is urgent:

• Faster release of approved funds: When budgets are allocated, agencies need mechanisms to release and use those funds swiftly, especially for renewal, maintenance, and smaller-scale infrastructure where delays are harmful and visible.
• Better project readiness and risk management: Scope, design, land issues, stakeholder and Treaty obligations, utility relocations, environmental assessments, and procurement packages need to be sorted early to avoid downstream delays. Procurement must be smart, with accurate estimates and non-financial attributes included. The ‘race to the bottom’ mentality of lowest-cost conforming will result in poor outcomes.
• Workforce retention and growth: Efforts must be redoubled to keep engineers in New Zealand. That means a consistent pipeline of work, competitive pay, clear career paths, meaningful graduate and intern positions, and recognition of experience. We also need to deal with STEM education participation, and attracting young people into engineering and technical trades.
• Prioritisation of standards reform: Reforming the standards system is critical to improving outcomes for safety, efficiency and productivity. This must ensure that Standards NZ is well-resourced and that the funding system reflects the public good nature of high‑quality standards.
• Transparent metrics and accountability: Because much of the problem is in the gaps – projects announced, funds ringfenced but work not started – having transparent metrics on time to market, spend versus plan, and delivery stages allows better oversight. Quarterly reporting, as being committed, is a good start.

New Zealand’s infrastructure challenges are complex, multidimensional and interdependent. If we are to build the roads, hospitals, schools, water facilities, public transport and resilient infrastructure our country needs – and to avoid another debilitating brain drain – the time to change is now. Engineers are ready, communities are waiting, and infrastructure cannot be allowed to remain the bottleneck for New Zealand’s future.