New Zealand Construction Sector Slowed

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Thursday, March 6th, 2014
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New Zealand building activity slowed in the final three months of 2013 as non-residential work dropped for a second quarter, offsetting a pickup in house building.

The volume of building work put in place across all building fell one per cent in the three months ended December 31, compared to a one per cent gain in the September quarter, according to Statistics New Zealand.

Non-residential work fell 3.9 per cent, adding to the September decline of 6.7 per cent, while residential work grew 1.1 per cent in the quarter, having gained 7.7 per cent in the prior period.

The value of work increased 0.6 per cent to a seasonally adjusted $NZ3.17 billion ($A3.00 billion) across all buildings, with a 2.6 per cent decline in non-residential work to $NZ1.27b and a 2.5 per cent gain in residential work to $NZ2.01b.

On an annual basis, total value of building work put in place rose 16 per cent to $NZ12.47b in calendar 2013 from a year earlier.  Construction is seen as linchpin for the economy this year with the $NZ40b Canterbury rebuild expected to ramp up.

“Weaker-than-expected building activity presents a clear downside risk to our forecast of 1.1 per cent growth in December quarter GDP (gross domestic product),” Westpac Banking Corp senior economist Michael Gordon said in a note after the figures were released.

Building activity in Christchurch, where the rebuild is gathering pace, rose a seasonally adjusted 0.7 per cent in the quarter, following a 20 per cent surge in the September quarter.

The figures follow new building consents data last week, which showed a decline in permits to build new housing in January, as apartment and retirement unit numbers dwindled from records in the tail-end of 2013.

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