Construction activity is driving GDP growth but it's still largely an Auckland and Christchurch story

The latest GDP figures released today have underlined the importance of construction activity to the economy. 

Statistics NZ said GDP increased by one per cent in the March quarter of this year, with the construction sector responsible for two-thirds of that growth.

Construction activity grew by 12.5% in the quarter, its biggest increase in 14 years.

Although Statistics NZ said growth in construction was strong throughout the country, its quarterly Value of Building Work Put in Place survey released earlier this month, suggests construction growth is largely an Auckland and Christchurch story.

It showed that the total value of building work throughout the country was $3.521 billion in the first quarter of this year, up $687 million (24%) on the first quarter of last year. 

But between them Auckland/Northland and Canterbury accounted for 84% of that growth.

Building work in Canterbury increased by $299m to $986m in the first quarter of this year compared with the same period last year, while in Auckland/Northland it increased by $279m to $1.272b over the same period.

In Wellington the increase was much more modest, with building work rising from $324m in the first quarter of last year to  $333m in the first quarter of this year, an increase of just 2.8 %.

The sector showing the biggest increase was residential building work in Canterbury, which jumped by $252m to $633m between the first quarters of 2013 and 2014.

Non-residential building work in the region grew at a more sedate space, increasing from $306m in the first quarter of last year to $353m in the first quarter of this year.

Residential construction also accounted for the lion's share of building work growth in Auckland/Northland, up by $165m (27%) to $774m in the first quarter of this year compared with the same period last year.