Total building activity increases

All building work rose for the third consecutive quarter, up 8.2 percent in the June quarter, after the removal of seasonal effects, Statistics New Zealand says.

For the third consecutive time, residential building volumes rose 10.8 percent in the three months to June, following a rise of 2.6 percent in March quarter.

Though work for the June quarter is now 21.7 percent higher than the recent low in September 2009, it is also 27 percent lower than the most recent peak in September 2007.

Non-residential building volumes rose 5.2 percent. The revised trend increased in the last two quarters, following a year of declines. It's 9.1 percent lower than the most recent peak in the December 2008 quarter.

ASB economist Jane Turner said both categories were much stronger than forecasted, and brought the first half year closer to expectations following a weaker than expected first quarter result.

Earthquake reconstruction work was likely to provide further support to the construction sector activity, ANZ economist Mark Smith said.

"Our view is that reconstruction work is likely to take a number of years to complete, with support likely to be more gradual rather than a big bang effect."

The seasonally adjusted value of all building work, in current prices, rose 8.6 percent or $2.9 billion in the June quarter, following a rise of 2.4 percent in March.

Seasonally adjusted value of non-residential building work rose 5.2 percent or $1.2b in the June quarter, while residential building work value rose 11.2 percent or $1.07b, following a 2.9 percent rise in the three months to March 2010.