NZ building work slows in 4th quarter as commercial activity drops 3.9%
March 5 (BusinessDesk) - New Zealand building activity slowed in the final three months of 2013 as non-residential work dropped for a second quarter, offsetting a pick-up in house building.
The volume of building work put in place across all building fell 1 percent in the three months ended Dec. 31, compared to a 1 percent gain in the September quarter, according to Statistics New Zealand. Non-residential work fell 3.9 percent, adding to the September decline of 6.7 percent, while residential work grew 1.1 percent in the quarter, having gained 7.7 percent in the prior period.
The value of work increased 0.6 percent to a seasonally adjusted $3.17 billion across all buildings, with a 2.6 percent decline in non-residential work to $1.27 billion and a 2.5 percent gain in residential work to $2.01 billion.
On an annual basis, total value of building work put in place rose 16 percent to $12.47 billion in calendar 2013 from a year earlier, led by a 28 percent gain in new dwellings worth $6.01 billion. Non-residential building work increased 3.3 percent to $4.89 billion in the year.
Construction is seen as lynchpin for the local economy this year with the $40 billion Canterbury rebuild expected to ramp up this year.
“Weaker-than-expected building activity presents a clear downside risk to our forecast of 1.1% growth in December quarter GDP,” Westpac Banking Corp senior economist Michael Gordon said in a note after the figures were released.
Building activity in Christchurch, where the rebuild is gathering pace, rose a seasonally adjusted 0.7 percent in the quarter, following a 20 percent surge in the September quarter. Residential work climbed 6 percent in the quarter, while non-residential dropped 6.6 percent.
The figures follow new building consents data last week, which showed a decline in permits to build new housing in January, as apartment and retirement unit numbers dwindled from records in the tail-end of 2013.
Rising property prices, particularly in Auckland and Christchurch, became a headache for the Reserve Bank last year, which was loathe to lift interest rates in response for fear of fuelling demand for an already elevated currency. Instead, the central bank imposed restrictions in October on the level of low-equity mortgage lending banks could undertake as a means to reduce the level of riskier loans.