New Zealand’s Secondary Sector: 2025 Snapshot

Manufacturing • Construction • Value-Added Processing

Summary

In 2025, New Zealand’s secondary industries are defined by reinvention and renewal, reshaping manufacturing and construction around technology, sustainability and smarter value creation.

Overview

The secondary sector transforms New Zealand’s raw resources into finished goods, from timber and food products to machinery, building materials and engineered components. In 2025 this part of the economy is facing a slow patch but also preparing for renewal.

After several years of cost pressure, tight finance and fragile demand, the sector is focusing on productivity, technology and sustainable production. Construction remains subdued, but investment is shifting toward advanced manufacturing, local processing and circular-economy innovation.

The story of 2025 is one of resilience and reinvention — doing things smarter, not just bigger.

Construction and Building

Builders, engineers and suppliers have experienced a quieter period, with many residential and commercial projects delayed or scaled back. The slowdown has encouraged a sharper focus on efficiency and better planning.

Prefabrication, modular methods and improved project management are now used to lift productivity. Retrofit work such as energy upgrades, earthquake strengthening and climate resilience projects is becoming a steady source of demand. Public infrastructure spending offers stability while private investment rebuilds.

MBIE forecasts construction activity to remain soft through 2025 and 2026, with a gradual recovery expected from 2027.

Manufacturing and Advanced Industry

Manufacturing remains a cornerstone of regional employment and export value, although its makeup is changing.

The Government’s Advanced Manufacturing Industry Transformation Plan is guiding the shift toward higher-value, lower-waste production. Automation and digital systems are spreading, though uptake is uneven and strongest among export-focused firms.

Rather than competing on price or scale, successful manufacturers are focusing on design quality, smart processes and sustainability.

Emerging strengths include:

• Food and beverage processing, turning premium ingredients into branded products for global markets.

• Wood and engineered timber, replacing raw log exports with value-added building materials and bio-products.

• Specialised machinery and equipment, high-precision producers serving export niches.

• Circular manufacturing, early-stage initiatives to reuse plastics, metals and construction materials.

These industries keep more value on shore while supporting regional jobs.

Metals, Plastics and Materials

Traditional heavy and materials-based manufacturing continues to face cost and environmental pressures but is adapting through recycling, cleaner production and specialised materials. Producers of metal components, plastics and composites are exploring low-emission processes and circular re-use systems. This segment remains important for infrastructure and export supply chains, even as it modernises under stricter sustainability expectations.

People, Skills and Technology

Skilled labour remains the sector’s biggest constraint. Engineers, fabricators, electricians and automation technicians are in short supply, particularly outside the main centres.

Training and apprenticeships are being reshaped to meet demand for digital, mechanical and sustainability skills. Businesses investing in robotics, design software and data systems report better productivity and consistency. The challenge is helping smaller firms access the same tools and training.

Sustainability and the Circular Economy

Sustainability has become an expectation. Manufacturers and builders are under pressure to reduce emissions, cut waste and design for reuse.

Circular practices are still emerging but have strong policy backing through clean-tech and low-emission funds. Using recycled inputs, extending product life and designing for disassembly are becoming areas of innovation.

Companies that act early on sustainability are strengthening their brands, attracting skilled staff and positioning for export growth.

Outlook

The near-term outlook remains cautious with modest demand and cost pressures, but the direction is clear. Productivity, technology and sustainability will drive the next expansion.

The secondary sector will increasingly connect with the primary industries, processing and refining New Zealand’s raw strengths into distinctive, high-value products.

Over the rest of the decade, performance will hinge on how well firms combine innovation, skill and environmental responsibility to build smarter products and stronger communities.