NZ industrial, accommodation building work offsets slowing residential work in 4Q
By Rebecca Howard
March 7 (BusinessDesk) - The value of New Zealand building work rose in the fourth quarter as a flurry of activity in industrial and commercial accommodation properties such as hotels made up for slower residential construction.
The seasonally adjusted value of total building work rose 2.3 percent on quarter in the three months ended Dec. 31 having gained 4.1 percent in the September quarter, Statistics New Zealand figures show. Non-residential work lifted 5 percent in the quarter, accelerating from a 1.9 percent pace in the prior quarter while residential work increased 0.9 percent versus a 5.3 percent increase in the September quarter.
The volume of total building activity, which excludes the effects of higher construction costs and typical seasonal patterns, advanced 1.4 percent in the quarter, led by a 4.1 percent increase in non-residential work, and a more modest 0.4 percent gain in residential construction.
"Work on factories and industrial buildings, and accommodation buildings helped boost non-residential activity in 2017," construction statistics manager Melissa McKenzie said in a statement. “In contrast, some of the biggest building categories, such as offices and shops, decreased compared with 2016."
The lift in accommodation buildings - which includes hotels, motels, boarding houses and prisons - was due to record high visitor levels in 2017, Stats NZ said. "The value of building work on accommodation buildings is likely to stay high into the near future, as the value of consents for tourism-related buildings surged in 2017," it said.
New Zealand's construction pipeline has been underpinned by a shortage of housing, primarily in Auckland, which is expected to peak in 2020 with some $20 billion of residential work predicted.
Today's figures show the actual value of all building work rose 5.5 percent to $5.62 billion in the three months ended Dec. 31 from the same period a year earlier, with the value of residential work up 7.7 percent to $3.64 billion while non-residential work increased 1.7 percent to $1.98 billion.
In Auckland, the actual value of all building work rose 4.3 percent on the year to $2.1 billion while in Canterbury it fell 6.6 percent on the year to $1 billion.