Non-residential building consents shoot through the roof in Northland

The number of non-residential consented projects in Northland - like Whangarei's new $59 million civic centre - has shot through the roof over the last year. Photo / Michael Cunningham

Non-residential construction activity in Northland has shot through the roof over the last year, registering an average annual increase of a whopping 46 per cent— more than double the rise nationally.

Provisional estimates from Infometrics show rising employment and consumer spending are supporting this growth in Northland, although the latter is driven by higher cost of living - particularly the cost of groceries.

Northland’s spending growth in the year to September is the fourth-highest across the country and remains above the 7.2 percent per annum inflation rate, which means there is a real expansion in underlying spending volumes across the region.

Infometrics economist Brad Olsen said rapid growth in commercial and industrial activities also includes building-based “social infrastructure” like hospitals, schools, and civic buildings.

The 46 per cent increase in non-residential consents was worth $291.6m.

A key feature of further growth in non-residential consents, he said, was $30 million worth of consents in August for hospital buildings which looked to relate to work at Whangārei Hospital.

“There’s also been healthy increases over the last year in storage building consents issued, likely reflecting increased investment in warehouses etc. as the supply chain changes and strengthens here in New Zealand.

“With more social investment expected, through the fuller work over time at Whangārei Hospital, expectations for now are for sustained high levels of building across Northland,” Olsen said.

Darrell Trigg's company is among those handling commercial projects in Northland. Photo / Supplied

Owner of Trigg Construction at One Tree Point, Darrell Trigg, said a number of factors were behind a rise in commercial and industrial consents, including the scale of those projects.

“The sector also looks to the Government to smooth the troughs and peaks. When things are starting to tighten up in the private sector, the industry pushes for the Government and other organisations to step up to the plate and start spending more.”

Construction firms moving out of Auckland and into regions like Northland also played a huge part in driving non-residential consents up, he said.

On the flipside, Trigg said a shortage of workers for a diverse range of roles was felt right across the construction sector.

The quarterly growth in Northland was a more moderate 2.4 per cent per annum, reinforcing the difficulties being reported with regard to finding workers, with unemployment at 3.5 per cent and a 7.4 per cent fall in the annual average number of Jobseeker Support recipients.

The yearly tourism expenditure of about $571m was down 2.2 percent a year ago, but Infometrics said Northland looked to be in a much better position than last summer.

“Tourism expenditure figures for the three months to September 2022 show a 20 percent increase compared to a year ago in Northland – that’s not bad growth. Tourism activity has been recovering stronger in recent times than we first expected, which means we’re seeing and hearing more optimism around traveller activity,” Olsen said.

He said another key Northland sector - the primary industries - was under pressure from rising costs, with a 13 percent increase in farm expenses over the last year.

It was the largest increase on record since 1993.

House sales in Northland decreased by 27 per cent in the year to September, compared with a fall of 25.6 per cent in New Zealand.

The number of people enrolled with a primary health organisation in Northland in the year to September 2022 increased by 1 per cent compared to a year earlier. Growth was higher than in New Zealand (0.4 per cent).

An average of 187,020 people were enrolled with PHOs in Northland the last year.