Economic Impact

A recent study has shown the concrete industry contributes about $7.44 billion to the New Zealand economy.

The report by the New Zealand Institute of Economic Research (NZIER), Cement and Concrete Production: Economic Impact Assessment was commissioned by CCANZ as part of the Concrete3 initiative. It assessed the economic and social contribution of the concrete industry to New Zealand’s sustainable development.

The NZIER report describes and values the economic activity that takes place within the following areas of the cement and concrete industries:

  • Limestone marl mining
  • Aggregate extraction
  • Cement manufacture
  • Concrete manufacture
  • Concreting services to construction
  • The report also estimates the extent to which the concrete industry increases demand for goods and services across the entire New Zealand economy.

The report not only calculates the industry’s dollar output but also how many people it employs and its percentage of gross domestic product, clearly showing the economic benefits that result from the use of concrete.

In total, the direct, indirect and induced economic impact of cement and concrete resulted in $7.44 billion of output throughout the economy in the year to March 2006. This activity resulted in 24,314 jobs and a value add of $2.8 billion – about 1.8 percent of New Zealand’s GDP in 2006.

The sustainability debate has had a tendency to focus primarily on environmental considerations. However, true sustainability incorporates economic and social considerations, and this report illustrates that concrete is strong in all three areas.

The total economic contribution consists of direct, indirect and induced effects. The direct component is the value of business generated within the concrete industry, indirect effects are from supplier businesses to the cement and concrete industry, while induced effects are the value of expenditure resulting from income generated by cement and concrete production.

The Concrete3 initiative has so far sought to highlight the inherent sustainable properties of concrete, such as its durability, fire resistance and thermal mass. Having assessed the industry’s economic impact, all the sustainability benefits associated with the application of concrete can now be conveyed.

It is fair to conclude that by using and demanding concrete, designers, specifiers and architects will help to mitigate climate change, as well as boost local economies and support local communities.