Our take on the latest Building work put in place (Tue 8 Mar 2022)
Total construction activity rose 8.9% (sa) in December
Non-res construction rose 16% (sa)
Building cost growth intensifies further
The key numbers...
- Building activity in the December quarter rose 8.9% (seasonally adjusted), recovering strongly from Delta restrictions in the September quarter, and leaving total activity 4.6%pa higher than a year ago.
- Non-residential building had the stronger bounce back in December, after suffering the hardest hit in the September quarter. Construction activity bounced back 16% (seasonally adjusted) in December, following a 12% decline in September.
- Residential building also had a bounce back in construction activity, increasing 5.2% from September (seasonally adjusted), to sit 4.5% higher than a year earlier.
- The impact of rising costs is evident, with the nominal value of activity rising significantly faster than the underlying volume of work. In nominal terms, residential and non-residential building activity was 19% and 13%pa higher in December, compared to the 4.5% and 4.7%pa real increase.
- The impact of COVID remains evident in non-residential construction, with accommodation building activity having declined 41%pa in December, although hospital construction rose 70%pa. Factory growth was also very strong, up 68%pa.
Construction activity by building type
Annual % change
...and our reaction
- The bounce back from the Delta lockdown in September was to be expected, but future growth will become increasingly difficult.
- Building costs are rising incredibly fast, particularly in the residential sector, which has a higher labour intensity.
- Firms are struggling with supply chain disruptions on top of an incredibly tight labour market. Cost growth is expected to pick up further, especially in the first half of 2022, and will be exacerbated by the current Omicron wave hitting the country.
- Consents for both residential and non-residential construction were strong throughout 2021, however translating those building intentions into activity is increasingly taking longer and costing more.
Latest updates
Premium
Building work put in place
Construction activity at a 10-year low
Thu 4 Jun 2026
Quarterly
13% Non-residential activity in March 2026 from March 2025
3.9% Residential activity from March 2025Total building activity at its lowest level (excl lockdowns) since 2015Premium
Building work put in place
Non-residential work hammered as residential softens further
Thu 5 Mar 2026
Quarterly
6.5% Non-residential activity from September 2025 (sa)1.1% Residential activity from September 2025 (sa)Total building activity at its lowest level (excl lockdowns) since 2015Building work put in place
Non-residential activity continues to decline
Thu 4 Dec 2025
Quarterly
Residential volumes up 3.3% in September from June 2025 (sa)Non-residential volumes down 1.3% in September from June 2025 (sa)Total quarterly activity now down 5.3% from September 2024Building work put in place
Lower residential activity leads construction decline
Thu 4 Sept 2025
Quarterly
Residential volumes down 2.9% in June from March 2025 (sa)Non-residential volumes down 0.4% in June from March 2025 (sa)Total quarterly activity now down 9.6% from June 2024