UPDATE: NZ building consents rose at fastest pace in three months in June
(Updates with economist comment)
By Tina Morrison
July 30 (BusinessDesk) - New Zealand building consents increased at the fastest pace in three months in June, rising a seasonally adjusted 3.5 percent, led by a surge in Canterbury.
The number of consents rose to a seasonally adjusted 2,104 in June from 2,033 in May, according to Statistics New Zealand. Excluding apartments, seasonally adjusted consents rose 2.9 percent. Unadjusted residential consents rose 27 percent to 1,950 in June from the same month a year earlier.
Building consent numbers have been on the rise, driven by the rebuilding of earthquake-damaged Christchurch and a shortage of supply in Auckland. Canterbury dwelling consents bounced back 22.5 percent in the month following some signs of softening over April and May, while Auckland consents rose almost 2 percent in the month, according to ASB Bank's seasonally adjusted figures.
"The June building consents data show a continued lift in house-building demand," Christina Leung, an economist at ASB, said in a note. "Today's result indicates the earthquake rebuild in Canterbury is firmly on track. Along with stronger house building demand in Auckland and improving non-residential building investment, we expect construction growth will continue to lead the New Zealand economy over the next couple of years."
The 6,827 dwelling consents issued in Auckland in the year through June is still below the 9,000 needed to be built each year to keep up with population growth in the region over the next couple of years, Leung said.
The value of non-residential building consents rose 32 percent to $490 million in June from May, the second-highest value on record behind $530 million in April 2009, the statistics department said. The figures aren't inflation adjusted.
"June was also a strong month for non-residential building consents, boosted by a $70 million approval for a hospital in Christchurch," Michael Gordon, a senior economist at Westpac Banking Corp. said in a note. "Setting aside its month to month volatility, there has been a strong uptrend in non-residential consents over the last three years, which is now starting to translate through to the actual building work figures."