Building activity boost highest since 2002

Home building in Canterbury leads building work boom in the March quarter.

Building activity over the past three months has risen significantly, leading to an overall increase of 16% for the March 2014 quarter, according to Statistics New Zealand’s latest figures. This follows 0.5% increases in each of the last two quarters.

Compared with the March 2013 quarter, construction work this quarter was higher across all areas of New Zealand.

Home building work was up 15%, significantly higher than the 2.3% lift last quarter. It’s the highest quarterly increase since September 2002, when it rose 16%.

Non-residential building work volumes were up 17%.

Including non-residential projects, building activity was up 16%, which is much higher than forecast by Westpac Bank economists, who had predicted a total growth of about 5%.

These figures are for work carried out, rather than forward-looking consent numbers, which may or may not be completed. Until now, building activity figures had lagged behind the pipeline of consents figures, but it now appears they may be catching up.

“Compared with the March 2013 quarter, construction work this quarter was higher across all areas of New Zealand

Positive trends for building activity

Growth continues in the residential building volume trend – it has been rising for ten quarters in a row and is now 62% higher than the most recent trough in the September 2011 quarter. However, it is still 10% lower than the series peak in the June 2004 quarter.

The trend for all building activity is also rising, but the current level is still 5.6% lower than the series maximum in the June 2005 quarter.
The non-residential buildings volume trend is now 11% higher than the most recent low point in the September 2013 quarter, but is still 8% lower than the series high in the March 2006 quarter.

Canterbury leads building growth

While building activity in the quarter was higher across the whole of New Zealand, Canterbury led the charge.

In current prices, the unadjusted value of all building activity in the March quarter was $3.5 billion, including $2.2b residential and $1.3b non-residential.

Total building activity in Canterbury, in current prices, increased a seasonally adjusted 25% in the March 2014 quarter following a 3.8% increase in the previous quarter.

Residential building was up 31% in Canterbury compared with a 12% gain in the rest of the country, and non-residential work was up 16% compared with a 19% lift elsewhere.

Building activity figures from Statistics New Zealand show that more 0.5b dollars was spent on new house building in the region in January, February and March.