NZ building work picks up in March quarter as residential construction grows 2.6%

Thursday 4th June 2015

New Zealand construction activity expanded in the first three months of the year, as the country's house building effort grew for a second quarter, making up for declining activity in the commercial space.

The volume of building work put in place across all building rose a seasonally adjusted 1 percent in the three months ended March 31, turning around a 1 percent contraction in the December quarter, according to Statistics New Zealand. Residential work expanded 2.6 percent, its second quarterly gain, and offsetting a 1.2 percent decline in non-residential work.

The value of work increased 2.5 percent to a seasonally adjusted $3.99 billion across all buildings, with residential work values rising 2.5 percent to $2.51 billion and commercial values increasing 2.6 percent to $1.49 billion.

"Residential building work increased mainly in Auckland and Canterbury, but non-residential building work chiefly increased in the South Island," business indicators manager Neil Kelly said in a statement.

The ANZ Business Outlook showed a split between firms' investment intentions, with growing expectations for more investment in residential construction, and a declining outlook for commercial construction intentions.

The building industry is struggling to keep up with demand in Canterbury, where the city recovers from a series of devastating earthquakes, and in Auckland, where a shortage of supply has pushed real estate to record levels and seen a resurgence in new home builds. Today's data showed the two cities accounted for 60 percent of all building work.

Auckland building work across all buildings rose a seasonally adjusted 0.8 percent in the quarter, turning around a 5.8 percent decline in December, while Canterbury work expanded 3.2 percent, adding to 5.3 percent growth in the prior quarter.

On an annual basis, construction across all buildings climbed 19 percent to $15.66 billion, with commercial building work up 18 percent to $5.93 billion, and residential construction up 20 percent to $9.74 billion.

New residential building work rose an annual 23 percent to $7.88 billion.

BusinessDesk.co.nz

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