Building activity stronger than expected in 4Q
New Zealand's building activity rose in the December quarter as working on non-residential buildings drove volume growth and the stronger number may lead economists to revise up their economic growth forecasts for the quarter.
The volume of building work put in place increased a seasonally adjusted 2.7 percent in the three months ended Dec. 31 versus a 0.8 percent lift in the September quarter, Stats NZ said. The lift was driven by more non-residential construction, including work on shopping malls and storage buildings, which was up 5.0 percent. This was the biggest quarterly increase in almost three years, it said.
“Growth in commercial construction activity was driven by more work on shops and accommodation buildings, particularly in Auckland,” construction statistics manager Melissa McKenzie said.
The volume of residential work rose a seasonally adjusted 1.2 percent from the September quarter. This was in line with the 1.3 percent growth in the September 2018 quarter.
ASB Bank said the data was "much stronger than we had anticipated" and the data - combined with a better than expected economic survey of manufacturing - meant it revised its preliminary fourth quarter GDP forecast to 0.4 percent quarter-on-quarter versus a prior forecast of 0.2 percent.
Today's figures show building work values rose 8.2 percent to $6.08 billion in the December quarter from a year earlier. Of that, non-residential work was up 10.5 percent at $2.18 billion and residential including alterations and additions rose 6.9 percent to $3.90 billion.
Today's figures show the annual value of new residential work of $12.32 billion was 6.4 percent higher than a year earlier, while alterations and additions were 7.8 percent higher at $2.46 billion.
Non-residential work totalled $8.0 billion in the 12 months through September, of which $1.41 billion was spent on office, administration and public transport, and $1.34 billion on education.
Newsroom is powered by the generosity of readers like you, who support our mission to produce fearless, independent and provocative journalism.