Concrete data points to decline in construction

The trend of declining ready-mixed concrete production continued in the third quarter, according to Stats NZ data.

The volume of ready-mixed concrete produced was 1.05 million cubic metres in the September quarter, down 10 per cent compared with the September 2022 quarter.

In the year to September, 4.28 million cubic metres of ready-mixed concrete was produced, down 11 per cent compared with the same period a year earlier.

In seasonally-adjusted terms, the volume of ready-mixed concrete fell 0.8 per cent in the September 2023 quarter, following an 0.7 per cent fall in the June quarter.

BNZ senior economist Doug Steel said the data pointed to an eventual decline in building activity.

Concrete production in the second quarter was also weak.

“On a seasonally adjusted basis this is another decline — that makes it seven in a row and 10 per cent down on the quarter, which suggests building activity is declining,” he said. “We think that there is going to be a material drop in building activity over the coming quarters.”

The numbers, with other manufacturing data, pointed to an economy going backwards.

Activity in New Zealand’s manufacturing sector dropped further during October, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).

The seasonally adjusted PMI for October was 42.5. A PMI reading above 50.0 indicates that manufacturing is generally expanding while below 50.0 indicates a decline.

“This was down from 45.1 in September, and the lowest level of activity for a non-Covidaffected month since May 2009,” the bank said.