Government backing behind most big building jobs, says survey

Most big building jobs are being funded by the Government, says Pacifecon's survey of activity in the construction sector.

Four-fifths of $5 million-plus jobs last month were state-funded but the report warned that could dry up.

Next year would be grim if the Government did not continue "pump priming", Pacifecon said.

The report also noted the high number of less expensive building jobs.

"Of the eight new planned projects in [the] upper North Island, only two exceed $25 million in construction value. These are the Northern Busway extension by the New Zealand Transport Agency on State Highway 1 between Sunnynook and Orewa and East Park Trust's Ormiston Neighbourhood Centre, stages two and three in Flat Bush.

"In the lower North Island, there was just one new planned project announced in the private and public sectors while in the South Island the ratio was one private compared with three in the public sector.

"During June, 27 top-end projects reached the tendering phase, of which six are private and 21 government," the report said, noting the $15 million-plus Formule 1 hotel at Auckland International Airport, developed by Accor Hotels & Resorts.

Plans are also under way for the $100 million-plus Pullman Hotel by Accor, with the CP Group, for a site in Central Auckland.

Bill English, Minister of Infrastructure, told Radio New Zealand yesterday that three-quarters of all non-residential construction work in the next two to three years would be Government-funded.

"It's a big chunk of the workforce which would be out of work. But we're taking the opportunity of a recession where it's easier to get the builders and the building companies and the materials at better rates and getting a lot of essential infrastructure," English said.

The Budget in May allocated $1.45 billion in capital spending in 2010/11, the second year of a five-year $7.5 billion infrastructure funding plan.

English said: "In addition to Budget initiatives, the Government is investing $10.7 billion over the next 10 years in New Zealand's State Highway network and $3.3 billion through Transpower in the next five years to upgrade the national grid."