Soaring building costs strike sour note for NZ's 'rock star' economy

Wellington

NEWLY qualified New Zealand carpenters are commanding six-figure salaries and construction costs have risen by half in under three years, symptoms of an unprecedented building boom straining the South Pacific nation's much-envied economy.

Fuelled by the record number of migrants needing houses and by repairs to roads and buildings damaged by several major earthquakes, construction accounted for 13 per cent of the New Zealand economy in the March quarter. The nationwide build is forecast to hit NZ$37 billion (S$37 billion) this year.

But the sector is hitting headwinds that are frustrating companies and builders and making the central bank wary.

Mark Adamson, chief executive of the country's largest construction firm, Fletcher Building, said that the labour market was so tight, manual workers can no…