Home building up 7.4pc in December

Photo / Northern Advocate

The seasonally adjusted volume of residential building activity rose 7.4 per cent in the December quarter, while non-residential volume fell 6.1 per cent.

That left the seasonally adjusted change in the volume of all building work up 0.7 per cent, Statistics New Zealand (SNZ) said today.

The rise in the residential volume was the largest since 2004, while the fall in non-residential activity was the third in a row and meant the volume was 12.9 per cent lower than in the March 2009 quarter.

For the December 2009 year, the unadjusted value of all building activity was $10.8 billion, down 13.7 per cent from the previous year.

The value of total residential building activity fell 19.8 per cent in the December year to $5.9b, with new dwellings down 23.1 per cent or $1.4b, while alterations, additions, and outbuildings down just 5.2 per cent or $72 million.

Non-residential building activity fell 5.2 per cent to $4.9b, with hospitals and nursing homes down $172m or 39 per cent, and commercial buildings down $149m or 8.9 per cent. Education buildings were up $127m or 20.5 per cent.

ASB Bank economist Jane Turner said she expected residential construction activity continue to recover over the coming quarters, following the sharp drop off in activity since mid-2008.

"However, the slowdown in house sales over the past few months does provide some downside risks to our 2010 residential construction outlook," she said.

Despite the weakness in non-residential construction in these latest numbers, Turner said she continued to expect non-residential construction activity to improve throughout this year.

"In particular, public projects should provide an offset some weakness in business building investment," said Turner.

"Non-residential activity tends to have long lags between consent issuance and construction activity, and a reasonable level of consent issuance in 2009 should flow on to construction work being done this year. We expect activity to remain relatively steady over the first half of 2010, and pick up towards the end of the year."


- WITH NZ HERALD