The construction skills pipeline is the investment we can't afford to pause

New Zealand's construction industry is caught between two pressures. One is the economic cycle, which has pushed activity to its lowest point since 2019. The other is a workforce challenge that will outlast any downturn: we are losing skilled people faster than we are replacing them.

The NZCBIA Building Construction Sector Report released this week in parliament puts hard numbers to what many in the industry already know. Nearly 75,000 workers left the construction industry in the past year. Directly related, apprenticeship completions have dropped from 58% to 43%, and about 95% of hiring simply fills the gaps left by departures, rather than building new capacity.

That exodus is not limited to qualified tradespeople. Many of those who left were apprentices, caught up in redundancies when their employers' workbooks thinned. So they went looking for jobs elsewhere. That is not good for the individuals who had invested in a trade, not good for the businesses that had invested in training them, and not good for the sector's long-term productivity.

Retention is the lever we control

Conditions have been challenging, but there are early signs things are improving. New Zealand's long-term demand for housing, infrastructure and skilled tradespeople isn't going away.

In tough times, there's a temptation to treat apprentice training as a cost that can wait. Some employers are understandably cautious, uncertain whether the pipeline ahead justifies employing an apprentice who needs supervision and development. But this logic, repeated across enough businesses, creates exactly the skills shortage we see now.

The report's modelling shows that training only pays off if employers retain the people they train. A business that puts an apprentice through four years of training and then loses them within two years has made a significant investment but hasn’t reaped the reward. A business that keeps its trained workers and moves them into chargeable work earlier transforms that same investment into a six-figure return.

Retaining skilled people in the trades is not solely an employer problem. Training providers like BCITO, Government and industry must work together to solve this problem. It is a collective challenge, and a collective opportunity. A key lever that Government can utilise is the timing and scale of public construction projects, that can either smooth the cycle or amplify the boom-and-bust pattern that drives workers out.

Demand is returning but confidence lags

The long-term outlook is positive. Underlying demand for housing and infrastructure hasn't disappeared. Residential consents have lifted over recent months which is a reliable leading indicator that things are looking up. Infrastructure investment is also forecast to rise from $55.7 billion this year to $65.4 billion by 2030.

However, consents don't build houses, business confidence does and right now, that confidence is tested by global uncertainty. This includes effects from the conflict in the Middle East and by domestic caution ahead of an election year. Economists expect conditions to improve and as they do, more latent demand will convert to work on the ground. When it does, the constraint won't be projects. It'll be people.

600 people are ready to be trained right now

At a time when many industries face disruption from AI, construction remains resolutely human and reliable. You cannot automate a roof installation or 3D-print a qualified tiler. People are choosing the trades because they offer durable careers that technology cannot easily displace.

Today, BCITO has around 600 people on its books ready to start an apprenticeship and work in construction. They just need an employer willing to take them on. Every month without a match is a month of lost capability and talent for the sector.

Ultimately, when demand surges, employers who held back will find themselves competing for the same workers they could have trained. The next boom will be shaped not by the projects we consented, but by the people we trained.

The choice is ours

Training apprentices is not an act of faith – it is preparation. A qualified workforce is the foundation on which every project depends – for every home, school, hospital or road built.

The current downturn will pass. The question is whether we use this time to rebuild the skills pipeline or let it erode further. That choice is within our control, and the cost of getting it wrong will be measured in years, not months.

About BCITO

The Building and Construction Industry Training Organisation (BCITO) is New Zealand’s leading building and construction apprenticeship provider. It is proudly New Zealand owned and with a 35-year track record, it is a trusted partner in the sector, delivering over 56,000 trade qualified professionals in 16 different trades.