Workforce pressures deepen amid cancellations, retirements and skills gap warnings
A new industry survey revealed that two-thirds of New Zealand builders are struggling to keep their job books full, with more than a third reporting cancelled projects as the residential construction downturn drags on.
Michael Bottrill from NZ Certified Builders said he had “certainly heard of some poor chaps having to shut up shop,” adding, “Certainly [I’ve] heard of apprentices being let go... it’s fair to say that’s because of a lack of work,” 1News reported.
The impact is also evident in the electrical trades, where apprenticeship rates have fallen to their lowest since 2011.
Recent data shows construction costs remain elevated despite easing inflation. Cotality’s Cordell Construction Cost Index rose 0.6% in Q2 2025, with annual growth at 2.7%. While still below the long-run average, the high-cost base continues to discourage new residential activity and has contributed to weak hiring demand.
Labour shortage looming as industry ages
Despite the slowdown, sector leaders are warning of an eventual skills crunch that could be far worse once the cycle turns.
“We’ve currently got about a 6,000 electrician workforce shortage, but we’re not feeling the impact of that right now because of the economic environment,” Master Electricians chief executive Alex Vranyac-Wheeler said.
Vranyac-Wheeler warned of a “double whammy” as capability gaps in emerging technologies combine with low apprentice numbers and high retirements.
“We’ve got about 20% of our workforce retiring year-on-year,” she said. “We’ve got fewer people coming into the industry.”
Electrician Darren Mathews, who recently laid off two workers, added: “We are all getting older and greyer, and we need the young guys to come through and replace our ageing workforce.”
Calls for government to step up
Industry advocates say more targeted support is needed to grow the trades workforce, including funding, immigration settings, and incentives for employers who take on apprentices.
Vranyac-Wheeler said businesses were reluctant to train apprentices while struggling with tight margins and inconsistent workloads.
However, Construction Minister Chris Penk ruled out intervention, stating: “I don’t think the government would look to intervene unnecessarily.” He remained hopeful the market would self-correct: “We’re going to have the opposite problem... and be desperately short of workers.”
Optimism remains in the trade
Despite the pressure, apprentices like Elijah MacGillivray remain upbeat. “A trade is probably the right place to be... you get to learn all kinds of stuff, even technically stuff that’s not really a part of your qualification,” he said.
Bottrill agreed that mindset mattered in tough times. “It is brutal. It is pretty tough out there, but we just need to stay positive – keep moving forward.”
For mortgage advisers, the current downturn highlights ongoing risks in the construction sector – particularly for clients reliant on building-related income or seeking loans for new-build projects. The prospect of future labour shortages also underscores the importance of assessing construction timelines and builder viability when advising on funding solutions.
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