An Investigation Into Sub-Sector Productivity: The New Zealand Residential Construction Industry

Abstract

Despite sustained investment, the New Zealand (NZ) residential construction sector exhibits a persistent productivity paradox, constrained by systemic challenges and an estimated annual cost of NZD 2.5 billion attributed to defects and rework. The extant literature exhibits a conceptual divergence, treating quality management (QM) and construction productivity as fragmented. Although seemingly aligned, theoretical foundations and practical approaches are distinct, thereby hindering the development of a holistic solution. This thesis addresses this oversight by rigorously investigating what effect QM has on enhancing productivity in the New Zealand residential construction sub-sector.

Employing a sequential explanatory mixed-methods design, the study utilised an initial survey (N = 106) to empirically rank productivity factors, followed by a diagnostic application of the Theory of Constraints (TOC) model. Quantitative findings were subsequently validated through qualitative semi-structured expert interviews (N=15).

The TOC analysis demonstrated that poor QM is the singular non-physical bottleneck limiting productivity and restricting the system’s capacity, driven by an endemic culture that “hyper normalises substandard practices.” The analysis establishes QM not as a contributory factor but as the root cause constraint. The study’s primary contribution is the development of a synthesised evidence-based QM strategy, (HEM) that resolves the conceptual divergence and provides a framework for sustainable performance.

The research culminates in a proposal for a National Construction, Productivity and Quality Commission (NCPQC), offering policymakers a blueprint for institutionalising systemic national-level reform. The findings move productivity improvement from an aspiration to a viable societal goal, contributing significantly to New Zealand’s economic resilience and societal well-being.