Today’s release of the Q3 2023 RLB Crane Index® is the 20th edition of the bi-annual publication, first launched in New Zealand in 2014 with only 71 cranes counted across the country at that time.
In this Q3 2023 edition, 144 long-term cranes were counted in New Zealand, reflecting the changes in the construction market using this simple metric over time.
The Q3 2023 RLB Crane Index® is the first edition to go digital. With more than a decade’s worth of data behind us, RLB has taken the index online to give the industry more granular information and a better historical picture of activity within each construction market across NZ.
Maps offer a pictorial representation of the collected data for each city using a pin locator for the approximate location of cranes. Existing crane activity analytics (data, trends and commentary across cities and sectors) is now presented online.
Government-led civil projects the major contributor
According to the 20th edition of the NZ RLB Crane Index®, non-residential cranes have hit a new peak of 95 cranes, or 66% of all cranes across the major centres. Ongoing strong government-led infrastructure (civil) projects are the main contributor to this high-water mark.
Chris Haines, Rider Levett Bucknall Director said, “Following a record high of 157 cranes in Q1 2023, the seven centres across New Zealand recorded 144 long-term cranes on developments this quarter: 90 cranes in Auckland, 18 cranes in Christchurch, 12 cranes in Wellington, 11 cranes in Queenstown, 5 cranes in Dunedin, 4 cranes in Tauranga and 4 cranes in Hamilton.”
“A net decrease of 13 long-term cranes and an 8% fall across New Zealand was recorded over the past six months, following a slowing of crane commencements. This is particularly true of the residential sector and a slowing pipeline where only eight new long-term cranes have been sighted since Q1 2023, but 29 residential cranes have been removed, equating to a 30% decrease in residential cranes across the country,” he added.
Residential market for vertical projects declining rapidly
New Zealand’s residential crane index value has fallen for only the third time since its inception. The drop to 223 index points reflects a significant 30% fall in 6 months and a lack of future pipeline in the short-term. The residential index represents 49 long-term cranes across the centres, with Auckland’s residential market for vertical projects declining rapidly with a shortage of new projects following projects now completing.
Both Christchurch and Wellington were the only centres that saw increases in crane numbers. All other centres reflected declining numbers in Q3 2023 count.
Christchurch has seen an increase in crane numbers for the second reporting period in a row, with four long-term cranes added to construction sites to total 18 cranes. There are now 12 long-term cranes on projects in the Wellington region, up from nine in the previous edition.
Queenstown continues to see positive activity, despite the index falling from 500 to 367 in this edition. Three new long-term cranes were added to sites spread across the Queenstown region, while seven cranes were removed. As a result, the Queenstown region has a total of 11 cranes, down from 15 in our last count. The residential sector remains the focal point of activity in the region, accounting for 72.2% of all long-term cranes.
Easing in private sector construction due to higher costs and interest rates
Chris continued, “Indicators point to further easing in private sector construction demand over the short-term, reflecting the headwinds from higher costs and interest rates. Banks also remain cautious about lending for both residential and commercial property developments.”
“Falling exports, falling dairy and log prices, an increasing government operating deficit, and an upcoming October election, all add uncertainty to future government spending.”
The October election outcome, and how quickly the next government forms, could have a significant bearing on the pipeline for both the residential sector and the infrastructure civil sector, particularly into 2024.
Auckland’s RLB Crane Index® fell to 273, with 90 long-term cranes representing a 13% drop. This drop in crane numbers reflects the current pressures on the residential market in New Zealand.
Residential long-term crane numbers in Auckland fell significantly by 33% from 54 at Q1 2023 to 36. There were 90 long-term cranes across Auckland, down from 103. Twenty new cranes were put in place since our last report, with 33 removed.
Stats NZ’s most recent Building Work Put in Place results for Auckland showed construction activity in Auckland increased by 9.0% in Q1 2023 on a year-on-year volume basis (September 2022 prices). However, overall construction activity dropped on a quarter-on-quarter basis by 6.2%. Activity in the residential sector fell by 6.8% on a quarter-on-quarter basis.
Residential crane sector continues to dominate in Auckland
Total building consents also reflect the slowing of activity in Auckland. There was a 0.6% drop in overall consents for the year to 30 June 2023. Residential consents fell by 4.2% but were offset by a 3.9% lift in non-residential consents. The residential crane sector continues to dominate in Auckland. However, activity has fallen from a high of 68% of all long-term cranes in Q3 2017 to 40%; the lowest proportion since the index commenced.
The mix of cranes in Auckland has seen long-term cranes on civil sites increase from 6% to 28% since Q3 2017. This includes Watercare’s Central Interceptor and the City Rail Link projects, which will have civil works continuing to late 2025. The election outcome will decide the fate of some key major national infrastructure projects that can take many years of planning before a crane is required on site.
FURTHER INFORMATION:
![Chris Haines](https://s31756.pcdn.co/oceania/wp-content/uploads/sites/1/2022/09/portrait-haines-chris-106x106.jpg.optimal.jpg)