Building Approvals in New Zealand to Reach Record Figure in 2017

Yellow excavatorStatistics New Zealand (Stats NZ) data showed that residential building activity increased in the first quarter of 2017, amid a decline in commercial construction.

Based on seasonally adjusted value, home construction rose 0.1% during the three-month period — a smaller increase compared to 2.3% in the last quarter of 2016. However, total building volumes dropped 0.8% between January and March.

Still, for-hire digger services and other construction-related work will still be in demand since the sector is expected to post a record number of building consents in 2017.

Expected Decline

In April, the number of approved housing projects dropped by 7.6%. This, however, reflected the holidays during the month, according to Warwick Quinn, CEO of the Building and Construction Industry Training Organisation.

Quinn said that the country remains on track to achieve more than 30,000 permits in 2017, which will be slightly higher than the recorded figure 2016. In Northland, for instance, the number of building consents rose 6.3% in April year over year. Nationwide, construction permits rose 2.4% in the same comparable period, while the actual value of all construction work amounted to $4.94 billion.

Lower Values

Stats NZ said that the adjusted building values for prices changes dropped in the first quarter for the first time since 2015. It cited a decline in commercial construction and other non-residential work as the reason for the decrease.

Some economists attributed the slower pace of construction growth to increasing building expenses and harder means to obtain funds. They expect this trend to continue until September.

Construction approvals indicate the strength of New Zealand’s economy and while the growth during the first quarter was rather muted, it still provided some expected pick up in future business that awaits companies.