New Zealand´s economic activity entered negative territory (again) in the June 2025 quarter, with GDP falling by 0.9%. The state of the economy obviously has a profound effect on the construction sector which has long been a cornerstone of New Zealand’s prosperity. The sector directly employs more than 300,000 people and drives demand for core building materials such as steel. Currently, however, both construction and steel are facing a constrained environment shaped by high interest rates (although now easing), reduced government infrastructure spending, softer housing demand and the growing importance of sustainability as a non-negotiable requirement. Within these sectors, infrastructure remains the most resilient pipeline, though not without uncertainty. A number of large projects have been cancelled or delayed. The transition of New Zealand’s water infrastructure from 3 Waters to ‘Local Water Done Well’ has also been a slow start. However, remediation following the 2023 Cyclone Gabrielle

and the Auckland Anniversary floods is generating steel demand for bridges, flood defences and transport resilience. These projects reinforce steel’s role in climate adaptation, even if the wider central government infrastructure pipeline remains politically contested. Overall, infrastructure activity is expected to increase following recent fast-track legislation and government investment, with commercial projects and housing to follow as funding conditions improve.

The residential construction market is mixed but has generally stabilised, with Stats NZ reporting that 34,078 new dwellings were consented in the year to August 2025. This was up 1.3% on the year ending August 2024. By region, the numbers of new dwellings consented in the year to August 2025 (compared to August 2024) were:

• 14,495 in Auckland (up 5.4%)
• 2,473 in Otago (up 16%)
• 2,813 in Waikato (down 4.4%)
• 727 in Northland (down 21%)
• 6,599 in Canterbury (down 1.7%)

Commercial construction has eased, with higher financing costs deterring new office and retail projects. Vacancy rates are rising in parts of Auckland and Wellington, further undermining the incentive for large developers to commit capital. However, with reductions in the OCR expected in coming months, the cost of borrowing will likely come down, thus adding to the green shoots of activity already being seen.

Meanwhile, steel pricing in New Zealand continues to be shaped by global forces. After peaking during the pandemic, international steel prices softened through 2023–24 but remain 20–30% above their pre-2019 levels. Currency exposure is a persistent risk because most imports are USD-denominated and a weaker Kiwi dollar inflates landed costs, creating headaches for contractors already facing tight margins. Fortunately, the exchange rate has been relatively stable over the past six months. That said, freight remains another challenge. While shipping rates have normalised since 2022, the Red Sea crisis and container imbalances continue to pose risks for a geographically isolated market such as New Zealand.

Local production at NZ Steel’s Glenbrook site partially mitigates exposure to all of this but is limited in scale. Nevertheless, Glenbrook will continue to be an important feature of the NZ steel market, supplying a wide variety of products for domestic consumption, including, COLORSTEEL® roofing and cladding, ZINCALUME® sheeting, AXXIS® steel framing, and various types of hot and cold rolled structural steel, including reinforcing steel through the company´s 100% owned subsidiary Pacific Steel, in Otahuhu.  

As far as the green steel transition is concerned, the most transformative development in New Zealand’s steel landscape is NZ Steel’s $300 million electric arc furnace (EAF) project at Glenbrook. This project was co-funded with about $140 million coming from government. Cold commissioning is expected to commence in December 2025 with full production from April 2026. Once operational, the project will:

• Cut Glenbrook’s annual emissions by roughly 800,000 tonnes CO₂e, which is equivalent to around 1% of New Zealand’s total annual emissions
• Reduce coal use at the site by 50%
• Halve New Zealand’s annual scrap steel exports, thus keeping more recycling within the domestic loop.

For distributors and fabricators, the EAF project will enable access to certified, low-emission steel which could command a premium in government procurement and ESG-driven private projects. This transition marks a shift from competing purely on price toward competing on carbon credentials.

Within this evolving environment, companies such as Steel & Tube will continue to play a pivotal role. With a nationwide network, the company has positioned itself as more than a commodity supplier, offering value through technical expertise, supply-chain resilience and a broad product range spanning structural, reinforcing, stainless and roofing steels. Steel & Tube’s recent focus on digital integration and customer-centric platforms has allowed it to improve efficiency and support clients facing tight project timelines. Its diversified exposure across infrastructure, commercial and manufacturing sectors provides protection against the downturn in residential housing. Moreover, Steel & Tube has been proactive in preparing for the low-carbon transition. By expanding its environmental product declarations (EPDs) and working closely with NZ Steel’s EAF transition, the company is well placed to deliver low-emission steel solutions which align with both government procurement policies and private sector ESG requirements.

The outlook for New Zealand’s steel industry is that economic headwinds are expected to start easing in 2026 resulting in improved activity, although the timing and speed of recovery remain uncertain. Long-term drivers will continue to be the fundamentals such as climate resilience, seismic strengthening, plus energy and infrastructure development.