NZ construction ranks among the country's most productive small business sectors, even as overall productivity lags behind Australia and the UK
New Zealand’s construction sector continues to rank among the country’s most productive industries, despite new data showing overall small business productivity remains below that of Australia and the United Kingdom.
The findings come from Xero’s first productivity benchmark, which measures the dollar value generated per hour worked by a typical employee in a small business. During the March 2026 quarter, labour productivity averaged $74.00 per hour, down from $75.30 in the previous quarter and below the long-term average of $76.30.
While productivity across the wider small business economy has remained relatively stable over the past six months, Xero says New Zealand continues to lag behind comparable economies, highlighting the need for ongoing investment in efficiency and technology.
For the construction industry, however, the results paint a more positive picture. Construction ranked alongside manufacturing and real estate services as one of the country’s highest-performing sectors, reflecting the industry’s ability to generate relatively high value from each hour worked.
The report suggests the sector’s continued investment in digital technology, project management systems and modern construction methods has contributed to stronger productivity compared with many other industries.
Xero also found significant regional differences, with manufacturing-focused Hawke’s Bay recording the highest productivity levels. The data indicates that local industry mix remains a major factor influencing regional economic performance.
Although retail recorded the strongest year-on-year productivity improvement, construction’s consistently high ranking reinforces its importance to New Zealand’s economy at a time when the industry continues to face rising costs, labour shortages and increased pressure to deliver projects more efficiently.
The report concludes that further gains across the construction sector are likely to come from continued investment in workforce skills, digital tools, automation and artificial intelligence, alongside broader improvements in infrastructure and business capability.
