Non-residential building consents
Annual non-residential consent values top $10b
30 Aug 2023
Our take on the latest Non-residential building consents (Wed 30 Aug 2023)
Value of non-res consents
$823m
In July 2023
Stronger hospital and factories consents recently
Annual non-res consents top $10b for the first time
The key numbers...
- The value of non-residential building consents issued in July 2023 totalled $823m, up 19% from July 2022. This value of work took the annual value of non-residential consents to above $10b for the first time.
- The annual value of non-residential consents is now 34% higher than the annual total over the year to July 2019, but substantial cost increases explain most of this increase. The actual volume of work consented is estimated to be just 4.4% higher over the same period.
- Hospitals and factories have been the largest contributors to overall growth recently, with a 121%pa increase in the value of hospital consents over the three months to July, and a 97%pa increase in factories consents over the same period.
- Annual growth in private consents remains steady at around 13%pa, the same as recent months. But public consents have resumed a stronger course recently, with the 10%pa growth seen over the 12 months to July 2023 the strongest growth in nearly a year.
- Canterbury and Waikato have seen the largest increases in the value of non-residential consents over the last year, with a 31%pa increase in both areas over the 12 months to July 2023.
A slight uptick in momentum
Annual running total ($m), adjusted for building-cost inflation
...and our reaction
- Non-residential building intentions remain stable at present, with a slight uptick in momentum recently after a more subdued period.
- Higher costs continue to make the value of consented non-residential work look larger than it actually is, with the volume of activity not as high.
- The turnaround in momentum for public consents underscores our previous expectation that government funding in the health and education space would support sustained levels of building activity.
- Factories consents have been stronger in the last few months, despite concerns around the slowing economy, which has reinforced our decision to revise upwards our expectations for this building type in our July forecasts.
- Sustained higher costs and interest rates are likely to drag future non-residential investment intentions lower towards the end of the year.
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