Building activity has risen 16% for the quarter to March,
driven by work in Canterbury and Auckland.
While the residential building activity for the quarter to
March was up 15.1% at an almost 12-year high, the
sustainability of the latest gains by the building sector is
Westpac senior economist Michael Gordon said there was strong
volume growth in both residential activity, up by 15.1%, and
commercial construction, up 17.2%, according to data from
Statistics New Zealand yesterday.
''The gains were shared across the country. While the
Canterbury region was up 25% by value, the rest of the
country saw a 17% increase in value,'' he said.
Residential value grew by 17% to $2.36 billion and commercial
value was up 18% to $1.4 billion.
Mr Gordon said it had been noted earlier that the level of
building activity was falling behind, relative to the
pipeline of consented work, and was due for a catch-up at
''However, the increase in the March quarter was well beyond
what we would have reasonably expected,'' he said.
Mr Gordon said, conversely, it may be ''a big ask'' for the
industry to have sustained that pace during the second
quarter, to June, suggesting there may be some negative risk
to the outlook for second quarter gross domestic product
ASB economist Christina Leung said overall construction
activity ''surged'' for the first quarter, reflecting strong
increases across both residential and commercial
''Very strong house-building activity in Canterbury and
Auckland led the surge in residential construction,'' she
Ms Leung expected the Canterbury rebuild and stronger
house-building demand in Auckland would remain the ''key
drivers'' of construction growth during the next two years.
''Recent inflation indicators point to capacity pressures
remaining contained in the building sector, despite the surge
in activity,'' she said.