Value of NZ building work moves higher in second quarter, volumes slip

The value of New Zealand building work rose in the June quarter. Photo / Stephen Parker

The value of New Zealand building work rose in the June quarter as both non-residential and residential activity ticked up, even as volumes eased as construction winds down in Canterbury, says Statistics New Zealand.

The seasonally adjusted value of total building work rose 0.9 per cent in the three months ended June 30, after falling 2.2 per cent in the March quarter. Residential work rose 1 per cent while non-residential work increased a seasonally adjusted 0.6 per cent in the quarter.

Still, total building activity in seasonally adjusted volume terms fell 0.5 per cent in the June 2017 quarter, Stats NZ said. Non-residential building activity was down 0.7 per cent and residential activity shrank 0.4 per cent from the March quarter.

"This is the second quarter in a row that building activity has fallen, as the post-earthquake residential rebuild in Canterbury winds down," prices and construction senior manager Jason Attewell said in a statement. "In unadjusted terms, building activity in Canterbury slipped to just under $1 billion a quarter for the first time in almost three years."

The slowdown comes as rampant house price appreciation abates and as escalating costs squeeze building firms' margins, offsetting a heavy pipeline of work underpinning demand for new construction for the foreseeable future.

Stats NZ said the volume trend for all building work has declined but is still 65 per cent higher than the most recent low point in the September 2011 quarter.

The actual value of all building work was $5.16 billion, up 4.9 per cent on the year. Of that, the value of residential building work was $3.36 billion, up 7.6 per cent on the year while the actual value of non-residential building work was $1.8 billion, up 0.2 per cent on the year.

The value of all building work in Auckland was $1.95 billion, up 6.8 per cent on the year while it was $998 million in Canterbury, down 14 per cent on the year.

Compared with the June 2016 quarter, the value of residential building work increased 6.6 per cent in Auckland, to $1.28 billion or 38 per cent of the New Zealand total, Stats NZ said. It declined 15 per cent to $533 million in Canterbury.