Substantial downturn in construction of new factories and industrial buildings

The number of new factories and industrial buildings being consented sank to a record low in the first quarter (Q1) of this year.

According to Statistics NZ, just 63 building consents were issued for new factories and industrial buildings across the country in Q1. That's the lowest number for any quarter in Stats NZ's data series which goes back to 1990.

The number of factories and industrial buildings being consented has been in a steady decline for the last three years. Prior to that there were usually well over 100 consents issued for these types of buildings each quarter, and in some quarters it was above 200. So the decline has been substantial.

Not only are fewer factories and industrial buildings being built, but they are also getting smaller. The average size of the buildings consented has been below 500 square metres (sqm) for the last two quarters, a nine year low.

Prior to the end of last year it was common for the average size of these types of new buildings to be above 1000sqm.

This is also affecting the value of the construction work involved for these types of buildings.

The total estimated value of the construction work, excluding land cost, for new factories and industrial buildings consented in Q1 this year was $131.4 million, down from $287.7m (-54%) in Q1 last year.

That was the lowest value of building work for these types of properties since Q2 2020, which marked the start of the pandemic restrictions.

The average value of the building work per project in Q1 this year was $2.1m, which was half what it was in Q1 last year.

A quarterly analysis of this data, which includes information on build costs per square metre, is available on our Industrial Building Consent Analysis page. This includes analysis for each of the main urban regions.

The same information is available for warehouse/storage buildings, office buildings and retail premises.