The Q3 2024 RLB Crane Index® released today, reveals a notable decline in construction activity across New Zealand, with a total of 124 long-term cranes currently operating on sites – a decrease of 11% (15 cranes) compared to the previous six months. This drop highlights ongoing challenges in the nation’s economy.
Steve Gracey, Auckland Managing Director and Oceania Chairman of Quantity Surveyors at Rider Levett Bucknall (RLB) noted, “The current results reflect a significant reduction in residential construction in particular, with the number of residential long-term cranes decreasing by eight (from 30 to 22), representing a 27% decline.”
Sharp decline in residential cranes indicates broader downturn
According to the RLB Crane Index®, residential cranes have sharply declined from their peak two years ago, when they comprised 57% of all cranes, to just 17.7% of all cranes today.
Steve said, “This trend indicates a broader downturn in the New Zealand construction market. In addition, capital investment contracted by 1.3% during the last quarter, as businesses exercise caution in the face of high interest rates and uncertain demand.”
“The prevailing recessionary economic conditions, coupled with high interest rates and tightening government budgets, continue to dampen demand across the industry. Social infrastructure, such as schools, social housing and healthcare sectors have all seen a decline in construction activity and long-term crane numbers” he added.
Non-residential sector also impacted due to economic conditions
According to the 22nd edition of the biannual report, there was a net decrease nationally of 15 long-term cranes (down 10.8%). 53 cranes were removed from sites, while 38 new long-term cranes were placed on sites.
In addition to the residential sector, the non-residential sector also took a hit with the number of cranes declining by 7 cranes (from 109 to 102). Only the civil (4), data centre/ industrial (3), and retail (2) sectors saw net increases.
Steve continued, “Looking at the seven key centres across New Zealand, 124 long-term cranes were recorded on developments this quarter: 68 cranes in Auckland, 20 cranes in Christchurch, 13 cranes in Tauranga, 8 cranes in Queenstown, 8 cranes in Dunedin, 5 cranes in Wellington and 2 cranes in Hamilton.”
Dunedin and Tauranga record highest crane numbers
The best performers of this edition were both Dunedin and Tauranga bucking the trend with their highest crane numbers since the commencement of the index, with eight and 13 long-term cranes respectively. Wellington recorded the lowest ever crane number count since the commencement of the index with only five long-term cranes, down from ten in the last edition. With ten cranes on site, the Te Kaha Christchurch Stadium continues to have the greatest number of long-term cranes on a single site in the country.
Auckland’s RLB Crane Index® fell by 14% representing a net reduction of 11 long-term cranes across Auckland. This is the lowest level in eight years. There were 68 long-term cranes across Auckland for this edition, down from the previous count of 79.18 new cranes were placed on site and 29 were removed.
Drop in overall crane numbers highlights pressure on residential market
Steve concluded, “The residential crane sector has dominated in recent times in Auckland. However, the proportion of residential cranes fell from 57% of all long-term cranes in Q3 2022 to 23.5% in this edition; the lowest proportion of residential cranes in Auckland since the index commenced.”
Without significant project commitments and commencements over the next six months, residential cranes will continue to decrease across the region. Currently, 16 long-term cranes are assisting residential construction activities on 14 projects. Most of these projects had cranes positioned on them during our last count.
Total building consents reflect slowing activity in Auckland
Only five new cranes commenced on residential projects for this edition. Many of the continuing projects will be nearing completion within the next six to 12 months, highlighting the potential of a significant absence of residential cranes towards the end of 2024. Total building consents also reflect the slowing of activity in Auckland.
Data centre sector in Auckland region remains strong
The non-residential count for Auckland increased by 3.6% (equivalent to two long-term cranes). The data centre sector remains strong in the Auckland region, with a record seven long-term cranes currently in place on projects.
According to the RLB Crane Index®, Tauranga reached a record high of 13 long-term cranes, following the addition of eight new long-term cranes. These included; four additional cranes added to the Tauranga Northern Link Project, commercial cranes placed on Panorama Towers, and Craigs Investment Partners House, two civil cranes on the Tauranga Waterfront, and Papamoa Eastern Interchange. One crane was removed from the Papamoa College on Doncaster Drive.
Click here to read the full Q3 2024 NZ RLB Crane Index®
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