Roading New Zealand, whose members do 80% of all of the country's roading work, says contractors have been downsizing and laying off staff over the past two years.
The Contractors Federation says seven of its 400 members, whose work ranges from building roads to civil infrastructure and residential developments, have gone bust in the past six months.
Roading New Zealand's chief executive, Chris Olsen, says while there has been state highway projects, work in residential development and local authority roading has been lean.
He says aside from the rebuilding work in Christchurch rebuilding work, he's not optimistic the situation will improve anytime soon.
But the Contractors Federation says it believes the flow of work should increase within the next year or two.