Understanding the demographics and dynamics of a construction workforce can assist with detailing historic success and challenges when attempting to progress into a diverse and inclusive workforce. The global financial crisis in 2008 presented the construction sector with a challenge, resulting in the workforce decreasing in size. The demographics of this workforce changed as a result, specifically with the age demographics. The older workers were more resilient to this recession while younger individuals were less likely to join the workforce and/or leave the construction sector. In addition, the source for new entrants into construction switched away from tertiary students towards career changers. Despite all this, the proportion of women in the construction industry has stayed stable since 2003, with an increase in the proportion of women as new entrants.
We can also see the beginning of the impact of the COVID-19 pandemic, with a plateau in the size of the workforce in 2020, the smallest growth since 2011.
The construction sector, by nature, is exposed to sudden changes in demand for work. The construction workforce, as a result, changes in size with these shocks. The key example is the global financial crisis in 2008. This demonstrated an overall decrease in the workforce size, followed by a recovery period. This report demonstrates the changes to the demographics of the workforce due to this change. This can assist with providing insight into how best to manage a changing workforce with the goal of increasing diversity and inclusivity.
Note that while employee data is complete for 2020 some employers will be missing in 2020 due to incomplete business tax records in the IDI.
The chart below demonstrates how the number of workers in the construction sector has changed over time. It can be broken down by industry, region and workforce status.
The size of the construction workforce appears to grow in correlation with economic conditions. It can be observed that there was a decrease in the size of the workforce from 2008 to 2010, due to the global financial crisis. The workforce then continued to grow. Note that 2020 has incomplete employer data so is not an accurate representation of the workforce that year.
The global financial crisis caused a decrease in the overall workforce. It was observed that the number of existing workers only dropped 11% (25,000 fewer workers), while new entrants dropped 39% (19,000 fewer new entrants). This suggests that during recessions, construction businesses freeze hiring new staff to minimise the impact on current staff.
Methodology
Our workforce is defined as the number of individuals who work full time in an industry for at least three months in a calendar year. These individuals are then linked to the region they spend the most time living in during that year.
Existing workforce are individuals who worked in the same industry the previous calendar year. New entrants are workers in their first year working in that industry. Returning workers are workers who have some work experience in the industry, but were not working in the industry the previous year.
This section breaks down the workforce by gender. In 2019, 19% of the construction workforce were women, which has been consistent since 2003. However, the proportion of new entrants that are women has been fluctuating between 16-18%.
Methodology
Our workforce is defined as the number of individuals who work full time in an industry for at least three months in a calendar year. These individuals are then linked to the region they spend the most time living in during that year.
Existing workforce are individuals who worked in the same industry the previous calendar year. New entrants are workers in their first year working in that industry. Returning workers are workers who have some work experience in the industry, but were not working in the industry the previous year.
This section breaks down the construction workforce by age groups. It can be observed that the proportion of workers that are of retirement age has grown from 1% in 2003 to 3% in 2019, with the absolute number increasing four-fold from 2,100 workers to 9,000.
After the global financial crisis in 2008, it was noted that older workers had higher job security in the construction industry. There was a significant drop in the number of workers aged 15 to 24, which has only just recovered in 2017 to pre-global financial crisis levels. This was largely due to the hiring freeze, particularly with young workers. This contributed to the increase in the proportion of workers in the 25 to 34 age group from 24% in 2009 to 30% in 2019.
Methodology
Age is calculated as the difference in years between the calendar year worked, and birth year.
Our workforce is defined as the number of individuals who work full time in an industry for at least three months in a calendar year. These individuals are then linked to the region they spend the most time living in during that year.
Existing workforce are individuals who worked in the same industry the previous calendar year. New entrants are workers in their first year working in that industry. Returning workers are workers who have some work experience in the industry, but were not working in the industry the previous year.
The most noticeable trend in construction worker ethnicity is the increase in the number of Asian workers. However, this increase is mostly concentrated in Auckland and Canterbury. The significant increase in Canterbury was likely due to the spike in demand for workers after the 2011 earthquakes. In Auckland, the number of Asian workers has tripled over a six-year period from 7,800 in 2013 to 24,000 in 2019, again, likely due to the significant increase in demand for construction workers.
Methodology
Ethnicity is taken from StatsNZ's sourced ranked list (which takes individuals census result first, in the absence of the census result it takes the next most reliable government source of ethnicity) and is summarized down into one ethnicity in the order of Maori, Pacific, Asian, MELAA, European, Other. Such that an individual identifying as both Maori and European will only be counted once as Maori.
Our workforce is defined as the number of individuals who work full time in an industry for at least three months in a calendar year. These individuals are then linked to the region they spend the most time living in during that year.
Existing workforce are individuals who worked in the same industry the previous calendar year. New entrants are workers in their first year working in that industry. Returning workers are workers who have some work experience in the industry, but were not working in the industry the previous year.
The primary activity of new entrants before entering the construction sector is represented in the chart below. It can be observed that career changers make up the majority of new and returning workers to the construction sector. The proportion of each source for new entrants stayed mostly the same after the global financial crisis, except for tertiary students which saw a decrease and career changers which saw an increase. Note that the data on secondary school students is only reliable from 2007 onwards.
Methodology
New and returning workers 'source' is defined as the workers primary activity in the year leading up to starting, or returning to work in an industry. Activities are ranked in the order of, Secondary school, Tertiary study, Career changers (work in other industries), Migrants (holding work or student visa), Returning kiwi (lived overseas for at least 6 months in the last year), Beneficiary (any beneficiary income). Such that an individual who worked in another industry and received beneficiary payments in the last year will only be recorded once and as a career changer.
Our workforce is defined as the number of individuals who work full time in an industry for at least three months in a calendar year. These individuals are then linked to the region they spend the most time living in during that year.
Existing workforce are individuals who worked in the same industry the previous calendar year. New entrants are workers in their first year working in that industry. Returning workers are workers who have some work experience in the industry, but were not working in the industry the previous year.
Access to the data used in this study was provided by Stats NZ under conditions designed to give effect to the security and confidentiality provisions of the Data and Statistics Act 2022. The results presented in this study are the work of the author, not Stats NZ or individual data suppliers.
These results are not official statistics. They have been created for research purposes from the Integrated Data Infrastructure (IDI) which is carefully managed by Stats NZ. For more information about the IDI please visit https://www.stats.govt.nz/integrated-data/.
The results are based in part on tax data supplied by Inland Revenue to Stats NZ under the Tax Administration Act 1994 for statistical purposes. Any discussion of data limitations or weaknesses is in the context of using the IDI for statistical purposes, and is not related to the data's ability to support Inland Revenue's core operational requirements.