Demand pushes up construction
The steady flow of migrants into New Zealand should continue to support demand for buildings and houses over the next year, says surveying firm Rider Levett Bucknall.
And given that population growth was very strong in Auckland – where a large percentage of migrants settle – it would continue to have the greatest overall demand for construction work, said the company’s director Grant Watkins.
There had been a decline in residential and non-residential construction in the June quarter, but the number of consents granted over the past 18 months suggested a pick-up in demand in the second half of this year.
Its third-quarter report on the construction sector, Forecast 93, comes as Statistics New Zealand reports that migration added a net 56,000 people to New Zealand’s population in the year to June.
Watkins said the revised migration data from Statistics New Zealand pointed to net migration inflows remaining solid. ‘‘This migration-led population growth should continue to support construction demand over the coming year.’’
Although Canterbury’s share of construction had fallen, the number of consents issued pointed to stronger construction demand there. He felt that should flow through in the coming year.
Wellington was starting to have a greater share of total construction activity, largely stronger commercial construction. Residential building had been surprisingly flat over the past year despite the surge in Wellington house prices.
In commercial construction, Auckland and Canterbury were the strongest performers over the past year. Strong demand for education and social buildings drove construction in Canterbury.
In Waikato, hotel construction boosted building activity in the non-residential sector. A further drop in interest rates would support demand for housing and construction work. Although stand-alone houses were still the most popular, consents for multi-unit dwellings had surged over the past year.
The Forecast 93 report was prepared for Rider Levett Bucknall by the New Zealand Institute of Economic Research.