Our take on the latest Building work put in place (Thu 5 Sept 2019)
Non-residential construction grew 10%pa
Auckland non-residential building climbed 29%pa
Farm building down 15%pa
The key numbers...
- The total volume of construction across New Zealand grew 7.8%pa in the June quarter. However, this strong growth still represented slowdown from the previous quarter’s 11% growth.
- Non-residential construction led the charge, growing 10%pa, while residential construction grew 6.3%pa.
- Auckland’s non-residential construction outperformed the rest of the country growing at 29%pa, but Canterbury’s non-residential construction was down 1.9%. Meanwhile, growth in residential construction was spread evenly across the country.
- By building type, the fastes growth was recorded by shops (up 34%pa); Social, cultural and religious (33%); and storage (33%). Farm building was down 15%pa.
Non-residential work put in place
Sept 1999 prices
...and our reaction
- Despite solid growth in the construction sector, total building volumes were still below our expectations, particularly for non-residential construction.
- Strong consent growth over the last year indicates intentions to build are there, but a lack of follow through suggests capacity pressures are again constraining activity.
- With unemployment at its lowest since before the Global Financial Crisis, businesses will be struggling to find the right type of labour. Capacity constraints will continue to slow projects as we near the peak of the construction boom.
- Low confidence in the economic outlook could also lead to an increase in the number of projects being put on hold, particularly in the non-residential subsector.
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