Our take on the latest Ready-mixed concrete (Mon 13 Nov 2023)
Concrete volumes fell 0.8% in the September 2023 quarter (seas. adj.)
Annual concrete volumes down 11%pa over September 2023 year
Weakest result for lower western North Island area since 2017
The key numbers...
- The total volume of ready-mixed concrete produced in the September 2023 quarter fell a further 0.8%, extending the run of declines to nearly two years. A total of 1.05m cubic metres of concrete was produced in the quarter.
- All regional groupings recorded an annual decline in concrete produced in the September 2023 quarter, the first time this has occurred across all areas since the lockdown-affected June 2020 quarter, and before that, the Global Financial Crisis (GFC). Parts of the North Island recorded the largest annual falls, with an 18% drop in Northland, a 15% drop in Taranaki, Manawatū-Whanganui, and Wellington area (“the lower western North Island”), a 12% drop in Waikato and Bay of Plenty, and a 10% drop in Auckland.
- Accounting for seasonality and excluding the lockdown-affected June 2020 quarter, concrete volumes produced are at their lowest levels in Waikato and Bay of Plenty since the December 2019 quarter, and the lowest in the lower western North Island since the September 2017 quarter.
- The annual volume of concrete produced across New Zealand is now down 11%pa, the largest annual fall in the year-end total since the 16%pa drop over the year to March 2010 during the GFC.
Concrete volumes still declining
000m3, quarterly ready-mixed concrete volumes, seas. adj.
...and our reaction
- The continued decline in concrete volumes produced reinforces the downwards trend for construction activity across New Zealand.
- The decline looks quite steep on a year-end basis – and that is true, it is a steep decline (and the largest fall in annual volumes since the GFC). But this decline is off a high level of concrete produced, with volumes in the September quarter only down 3% below the average quarterly production in 2019.
- The decline is also becoming more apparent in the North Island, with a 13%pa decline in annual concrete volumes compared to a 2.7%pa fall in South Island volumes. Part of that weaker North Island outcome is lower levels earlier in the year due to the Auckland floods and Cyclone Gabrielle, but the weakness in lower western North Island volumes speaks to a less weather-affected decline.
- We expect that concrete volumes will continue to moderate until around 2026 as residential construction activity slips lower, and as non-residential work hits a peak and then starts to fall.
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