Big lift in Canterbury reconstruction
Residential building rates jumped in the June quarter, up 7.1%, led by strong growth in Canterbury.
Wednesday, September 5th 2012, 12:00AM
by The Landlord
By comparison, non-residential building work contracted by 5.6%.
Canterbury’s reconstruction activity is gathering pace, with residential building work up 27% in the quarter and 60% up on its June 2011 lows.
But Westpac senior economist Anne Boniface said more work was going on in Canterbury than the statistics suggest.
“Even this sizable lift is likely to understate the total amount of residential building activity underway in the region. This is because the Building Activity Survey, by design, doesn’t cover non-consented building work. The starting point for the survey is a sample of consents valued over $5000, with respondents then quizzed on the value of work on these projects they have completed over the past three months. Consequently, today’s data won’t capture the significant volume of repair work going on in the region.”
In other regions, the pace of growth in residential building was more subdued but still positive for most (with Wellington the key exception). There was a 5% lift in Auckland activity, which more than reversed the 2% decline recorded over the March quarter.
Westpac said construction activity would continue to accelerate off its current low level over the next couple of years.
Boniface said: “While there will inevitably be volatility around the pace of this acceleration from quarter to quarter or month to month, the sheer volume of reconstruction that needs to take place in Canterbury means a big lift is almost inevitable.”
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