Construction activity appears to have fully recovered from the effects of the COVID lockdowns earlier this year, although residential work has fared better than commercial.
According to Statistics NZ's Building Work Put in Place Survey, $6.681 billion worth of building work was started in the third quarter of this year, up 2.4% compared to the same quarter of last year.
That follows declines of 23.0% in the second quarter, and 2.3% in the first quarter compared to the same quarters of last year.
New residential building work totalled $3.789 billion in the third quarter of this year, an all time high and up 8.7% compared to the same period of last year.
However non-residential work, which includes commercial premises such as shops and offices and non-commercial buildings such as hospitals and schools, was down 4.9% compared to the third quarter of last year.
That follows a 25.1% decline in the second quarter of the year, and a 1.3% decline in the first quarter compared to a year earlier.
In non-residential work, the biggest decline in the third quarter, year-on-year, was in retail premises -24.8%, followed by farm buildings -15.6% and social,cultural and religious buildings -12.4%.
In the main regions, growth in new building work was strongest in Wellington where it was up 15.3% in the third quarter of this year compared to a year earlier, followed by Waikato where it rose 12.6%.
Activity in Auckland was unchanged from a year earlier and in Canterbury it was down 4.6%.
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6 Comments
Interesting, it looks like construction numbers would follow about a year behind inflation numbers in housing prices.
Do you think a number of building projects may be trying to cash out following the crest of the property bubble?
It's always an undersupply until it isn't. With immigration halted, our building pace may finally catch up.
About a quarter of children live in damp and sometimes mouldy homes
More than a third of Māori and Pacific people were living in damp housing
We're not out of the undersupply territory until we start witnessing a drop in such horrifying trends. Still think we're first-world?
Yes. Now we are first world with better housing rules.
Construction usually leads inflation.
Commercial construction is still busy but the number of new projects isn't like the madness of 2018 and 2019. The thing with financing for commercial projects is that they need to have a business case that stacks up, and it's likely the banks are being a bit tight and cautious right now (they don't want to be holding the bag if things turn sour).
Commercial projects only cash out if a building is fully tenanted (the building's value depends on the income generated unlike the US stock market).
Far better to rent...after selling your own....But ....there is always a catch...
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