KEY POINTS:
Building work put in place rose a seasonally adjusted 0.2 per cent in the September quarter compared to the previous three months, Statistics New Zealand (SNZ) data shows.
Residential work was up 7 per cent following an 8 per cent fall in the June quarter, while non-residential work dropped 9.2 per cent on top of a 5 per cent fall in the June quarter.
The small rise in the seasonally adjusted value of all building work followed a fall of 6.8 per cent in the June quarter.
The unadjusted value for all building work put in place in the September 2006 quarter was $3.321 billion, up $59 million or 1.8 per cent from the September 2005 quarter. After removing price changes, the value was down 4 per cent.
The unadjusted value for residential building work in the September 2006 quarter was $2.004b, up $117m or 6.2 per cent compared with the September quarter last year. Removing the impact of price changes the increase was 0.5 per cent.
The trend for the value of residential building work put in place was flat in the September 2006 quarter, following a fall in the previous quarter, SNZ said.
When the impact of price changes was removed, the latest three quarters showed a decrease.
Despite falls in the seasonally adjusted value of non-residential building work, values remained at a high level, SNZ said.
The unadjusted value for non-residential building work put in place in the September 2006 quarter was $1.317b, down $58m or 4.2 per cent compared with the high September 2005 quarter. After removing price changes, the decrease for the period was 9.7 per cent.
Commercial buildings including shops, restaurants, taverns, offices, administration and storage buildings accounted for 30 per cent of the non-residential work put in place during the September quarter, with a value of $393m.
The trend for the value of non-residential building work put in place was showing a fall for the latest two quarters, following growth during the previous three years, SNZ said.
The unadjusted value of all building work put in place for the year to September was $12.684b, up $570m or 4.7 per cent from the previous September year. Work on residential buildings was up $203m and on non-residential buildings up $367m.
The trend for the value of all building work put in place showed a fall for the latest two quarters, following rises in the previous five quarters, SNZ said.
After removing price changes, the real level of building activity was equivalent to that in early 2004.
Goldman Sachs JBWere economist Shamubeel Eaqub said the sharp contraction in non-residential activity for the September quarter was unexpected.
But despite non-residential contractions in the past two quarters the level of construction activity remained elevated.
The outlook for the construction sector remained relatively benign, Mr Eaqub said.
Residential construction activity was expected to moderate through to mid-2007, but the trough was likely to be much higher than in previous cycles due to a floor placed by solid net migration levels.
Non-residential building activity was expected to moderate during the coming year, but to remain elevated by historical comparisons.
Infrastructure construction, not covered in today's data, was also likely to remain elevated with a large pipeline of public sector committed projects.
- NZPA