Building work tipped to improve

New Zealand's construction industry is expected to improve this year. Photo / Brett Phibbs

New Zealand's construction industry is expected to improve this year, led by alterations and new home building after the Canterbury earthquake, according to BIS Shrapnel, a Sydney-based forecaster.

The value of home-building approvals would rise by 5 per cent in the year ending March 31, the forecaster said. Residential construction would counter an expected decline in erection of office blocks and sports arenas, BIS said.

Approvals fell in the second half of 2010 as an earthquake rocked Canterbury while concerns that national debt levels were rising curbed confidence. More home building adds to the case for economic growth to accelerate this year.

"The alterations and additions sector is holding up the residential rebound," Adeline Wong, senior projects manager at BIS, said. "Building activity related to the reconstruction of quake-damaged properties is expected to filter through" in the three months ending March 31, she said.

Prime Minister John Key on Monday said the economy was "anaemic" in the second half last year.

Building approvals were likely to stage a strong rebound in late 2011 and early 2012, underpinned by quake rebuilding and also repair work on leaky homes, Wong said.

Commercial building was also likely to recover from late 2011 as economic growth strengthened, she said.

- BLOOMBERG