Building work put in place

Lower residential activity leads construction decline

4 Sept 2025

Matthew Allman

Our take on the latest Building work put in place (Thu 4 Sept 2025)

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

The key numbers...

The volume of total building work put in place declined 1.8% (seasonally adjusted) in the June 2025 quarter from March, returning to the downward trend which extended for six consecutive quarters prior to the March 2025 quarter.
The overall decline was driven by a fall in residential activity, which fell 2.9% in June from March (seasonally adjusted). In the March quarter, residential activity rose 2.8% (revised up from 2.6% originally), breaking the 18-month stretch of falls between mid-2023 and the end of 2024. The annual decline in residential activity in the June quarter remained in the double-digits, at -10%pa in real terms.
Non-residential activity declined for the fourth consecutive quarter, falling a narrow 0.4% in June from March (seasonally adjusted). Annual growth in non-residential activity in real terms remains significantly negative, down 9.0%pa in the June quarter, and has now been negative for five consecutive quarters.
Total building activity in the June quarter was 9.6% lower than a year ago, marking two full years of consecutive declines in real terms for the first time since 2010.

Non-res decline now similar to the fall in res activity

Annual % changes in building work put in place (in real terms)

...and our reaction

Residential activity was weaker than expected in the June quarter, with activity 4.4% below our forecast. The underperformance was due to lower new dwelling activity, coming in 5.6% below our forecast. Residential additions and alterations (A&A) work increased from the previous quarter for the first time since December 2023, driving the 3.9% overperformance for this work type compared to our forecast.
The only broad region which saw an annual rise in residential activity was the South Island (excl. Canterbury) which saw a 3.4% rise from the June 2024 quarter. This is the first time a broad region has seen an annual rise in residential activity since the start of last year (excluding a revised-higher 0.1% rise in SI excl. Canterbury activity last quarter). The deepest declines were seen in Wellington (-18%pa), Rest of North Island (-15%pa), and Waikato (-13%pa).
Non-residential activity didn’t decline by as much as expected, with non-residential work coming in 6.9% above our forecast. This relative overperformance was driven by hospitals ($99m higher than expected) which contributed to around half of the overperformance. Factories and storage were also $57m and $56m higher than expected respectively.
Quarterly non-residential activity began declining on a year ago in real terms in June 2024, lagging behind the first decline in residential activity which occurred in March 2023. Despite being less downbeat than we forecast, the outlook for non-residential activity remains negative given its tendency to lag behind trends in residential activity and the broader economic cycle. The decline in non-residential building consents since mid-2023 continues to contribute to the narrowing pipeline of projects of this build type.

Latest updates

Premium

Building work put in place

Lower residential activity leads construction decline

The key numbers...

Non-res decline now similar to the fall in res activity

...and our reaction

Latest updates

Non-residential work hammered as residential softens further

Non-residential activity continues to decline

Res construction rises for the first time in two years