The value of New Zealand building work rose in the fourth quarter as a flurry of activity in industrial and commercial accommodation properties, such as hotels, made up for slower residential construction.

The seasonally adjusted value of total building work rose 2.3 per cent on quarter in the three months ended December 31, having gained 4.1 per cent in the September quarter, Statistics New Zealand figures show.

Non-residential work lifted 5 per cent in the quarter, accelerating from a 1.9 per cent pace in the prior quarter, while residential work increased 0.9 per cent versus a 5.3 per cent increase in the September quarter.

The volume of total building activity, which excludes the effects of higher construction costs and typical seasonal patterns, advanced 1.4 per cent in the quarter, led by a 4.1 per cent increase in non-residential work, and a more modest 0.4 per cent gain in residential construction.

“Work on factories and industrial buildings, and accommodation buildings helped boost non-residential activity in 2017,” construction statistics manager Melissa McKenzie said in a statement.

“In contrast, some of the biggest building categories, such as offices and shops, decreased compared with 2016.”

The lift in accommodation buildings – which includes hotels, motels, boarding houses and prisons – was due to record high visitor levels in 2017, Stats NZ said.

“The value of building work on accommodation buildings is likely to stay high into the near future, as the value of consents for tourism-related buildings surged in 2017,” it said.

New Zealand’s construction pipeline has been underpinned by a shortage of housing, primarily in Auckland, which is expected to peak in 2020 with some $20 billion of residential work predicted.

Today’s figures show the actual value of all building work rose 5.5 per cent to $5.62 billion in the three months ended December 31 from the same period a year earlier.

The value of residential work rose 7.7 per cent to $3.64b, while non-residential work increased 1.7 per cent to $1.98b.

In Auckland, the actual value of all building work rose 4.3 per cent on the year to $2.1b, while in Canterbury it fell 6.6 per cent on the year to $1b.

By Rebecca Howard