NZ’s building activity appears to have peaked, according to Statistics New Zealand’s latest quarterly survey of building work.
It concluded that $6.65 billion of building work was undertaken in the first quarter of this year, declined from $6.774 billion in the fourth quarter of last year, and $6.678 billion in the third quarter of 2020.
That demonstrates that the total building activity peaked at the end of last year, although the figures are still provisional.
The slight decrease in activity has been entirely driven by a decline in commercial building work, albeit residential building activity remains at a record high and, however, appears to be flattening.
The value of non-residential building work undertaken recorded $2.099 billion in the first quarter, decreased from $2.231 billion in the fourth quarter of 2020 and $2.316 billion in the third quarter of last year.
The value of non-residential building work in the first quarter was lower than in any quarter of 2019, which was an issue prior to the global pandemic.
But, the value of residential building work hit a record high of $4.551 billion in the first quarter, although that was up only marginally from $4.543 billion in the fourth quarter of 2020.
In the 12 months to the end of March, a record $16.562 billion of residential building work was carried out, up 3.4% on the previous 12 months and $8.36 billion of non-residential building work was also carried out, down 8.9% compared to the previous 12 months.
The biggest declines in non-residential building work reported for retail premises, which were down 24.2% in the 12 months to March compared to the previous 12 months, followed by office buildings -21.7%, farm buildings -11.5% and industrial buildings -5.3%.
The Auckland region is the biggest driver of building activity, accounting for $2.683 billion (40.3%) of all building work carried out in the first quarter.
But, the total value of all building work in Auckland has now down slightly for two quarters in a row, sliding from $2.73 billion in the fourth quarter of last year and $2.739 billion in the third quarter.
The survey concluded that residential builders in Auckland were more likely to have been affected by COVID-related issues than those in the rest of the country, with the availability of materials and equipment being a particular issue for new housing projects in Auckland.
Compared with some of the nations in the Commonwealth, NZ’s housing market is somewhat lagging behind. When the travel commences, the market is poised to bounce back.