Modelling supply-side constraints in the construction sector

We’ve received feedback that our forecasts for new dwelling consents are overly optimistic given capacity pressures. In response to this feedback, we have created a supply-side model to help inform our residential construction forecasts. Our core model is essentially a demand-based one. In most cases, the underlying fundamentals of population growth and interest rates are enough to inform us of what’s to come. But this approach only works if supply can keep up.