Nation Building: A century and a half of infrastructure investment in New Zealand
Kiwis are spending more than ever on our infrastructure. Fifty years ago, the average New Zealander was spending about $3,000 per year on infrastructure. Today, that figure is closer to $5,000 and is increasing fast. But we also have more to show for it. The value of our infrastructure networks has grown substantially in inflation-adjusted terms.
We don't currently have a clear understanding of what we’ve spent on infrastructure over a long period of time. A short-term view on infrastructure investment doesn’t give us an accurate picture of how much is being spent and on what, This research sets out to address this knowledge gap by collating 150 years’ worth of infrastructure data and tracking how our networks were built and shaped over time.
Key findings
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Overall infrastructure investment has averaged 5.6% of GDP over the last 150 years. When averaged over 30-year periods, investment levels have never been higher than 7.3% (1949-1978 average) nor lower than 5.0% (1978-2007 average).
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Infrastructure investment over the last two decades has consistently been close to the long-run average at 5.8%.
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We identified four periods where infrastructure investment as a share of GDP was sustained at a considerably higher level than the long-run average. We define these periods as infrastructure investment ‘booms’.
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The Vogel boom, from around 1870 to 1887, includes Premier Julius Vogel’s public works schemes for network infrastructure (road, rail, telegraphs).
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The pre-war boom, from around 1904 to 1914, was a period of higher investment following recovery from the Long Depression. This was a time when the economy was being reshaped by refrigeration.
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The inter-war boom, from around 1927 to 1940, was a period of higher investment following the recovery from the First World War and continuing through the Great Depression public works programmes.
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The post-war boom, from around 1949 to 1979, is the longest period of consistently above-trend investment that we observe. It coincides with the period of population and economic growth after the Second World War.
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We have identified 14 sector-level booms over the last 150 years. Some sectors experience multiple booms like land transport, while others have a single large boom (hospitals, education, social housing). We estimate that the telecommunications, tertiary education, and water sectors are currently in a boom cycle.
Nation Building: A Century and a Half of Infrastructure Investment in New Zealand
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