Construction down 0.9%; Canterbury weaker again
CONSTRUCTION activity in New Zealand for the quarter to March was down 0.9%, against the grain of market expectations of a small rise for the period.
Residential building activity volume fell 0.5% for the quarter while nonresidential building activity volume fell 1.5%, following a previous quarter 3.8% rise, Statistics New Zealand data showed.
Auckland and Canterbury drove construction activity, the pair accounting for $3 billion, 56% of the national value of total building activity in the quarter to March.
SNZ construction statistics manager Melissa McKenzie said the fall in the latest quarter came after record high volumes in the December 2017 quarter.
Westpac senior economist Satish Ranchhod said the 0.9% construction drop was below forecasts by the market and Westpac, which had expected a 0.5% rise.
‘‘Construction activity has essentially been flat for three quarters now,’’ he said in a statement.
Construction could be ‘‘lumpy’’ on a quartertoquarter basis, especially in the case of nonresidential projects, Mr Ranchhod said.
Beneath the headline figures, Mr Ranchhod said residential construction in Canterbury was in continued decline, while Auckland was still seeing modest gains.
‘‘On a nationwide basis, homebuilding has been essentially tracking sideways since mid2016,’’ he said.
Ms McKenzie said the fall in building activity had taken into account the effects of higher construction costs and typical seasonal patterns.
ASB senior economist Jane Turner said construction activity was likely at, or close to, a peak, with a combination of capacity constraints and faltering constructionsector confidence likely to cap any further growth during 2018.
The lift in activity in Auckland and Wellington was offset by falls elsewhere, with the weakness led by Canterbury, she said.