Building Consents - November 2001
Data Flash (New Zealand)
The number of new dwelling consents issued increased 4.8% mom in November following a 12.2% rise in October. The outcome was influenced by a sharp rise in consents for apartment units in Auckland City.
Non-residential building consents with a value of $211m were issued in November, so that the three-month running total was 5.8% higher than a year earlier.
Apartment projects - which can distort the overall monthly data due to their volatile nature - played the key role in the November outcome, more than explaining the observed growth. Nonetheless, we think that building consents data confirms that house-building activity is on an upward trend, consistent with the observed pick-up in house sales (see chart below), and with the positive stimulus from low interest rates and sharply higher population growth. This suggests that a solid upswing in residential construction activity is in prospect this year, as projected in our December Economic Forecasts. This should provide a significant boost to the domestic side of the economy in the face of a more subdued outlook for the external sector (the latter weighed down by declining commodity prices, weak global demand and the impact of 11 September on tourist activity). At the margin, this data supports our view that the RBNZ will refrain from easing further on 24 January.