Value of building work moves higher in second quarter

The value of New Zealand building work rose in the June quarter as both non-residential and residential activity ticked up, even as volumes eased as construction winds down in Canterbury, says Statistics New Zealand.

The seasonally adjusted value of total building work rose 0.9 percent in the three months ended June 30, after falling 2.2 percent in the March quarter. Residential work rose 1 percent while non-residential work increased a seasonally adjusted 0.6 percent in the quarter.

Still, total building activity in seasonally adjusted volume terms fell 0.5 percent in the June 2017 quarter, Stats NZ said. Non-residential building activity was down 0.7 percent and residential activity shrank 0.4 percent from the March quarter.

"This is the second quarter in a row that building activity has fallen, as the post-earthquake residential rebuild in Canterbury winds down," prices and construction senior manager Jason Attewell said in a statement. "In unadjusted terms, building activity in Canterbury slipped to just under $1 billion a quarter for the first time in almost three years."

The slowdown comes as rampant house price appreciation abates and as escalating costs squeeze building firms' margins, offsetting a heavy pipeline of work underpinning demand for new construction for the foreseeable future.

Stats NZ said the volume trend for all building work has declined but is still 65 percent higher than the most recent low point in the September 2011 quarter.

The actual value of all building work was $5.16 billion, up 4.9 percent on the year. Of that, the value of residential building work was $3.36 billion, up 7.6 percent on the year while the actual value of non-residential building work was $1.8 billion, up 0.2 percent on the year.

The value of all building work in Auckland was $1.95 billion, up 6.8 percent on the year while it was $998 million in Canterbury, down 14 percent on the year. Compared with the June 2016 quarter, the value of residential building work increased 6.6 percent in Auckland, to $1.28 billion or 38 percent of the New Zealand total, Stats NZ said. It declined 15 percent to $533 million in Canterbury.

(BusinessDesk)