New Zealand building work put in place up 0.5% in September

Total building work put in place rose 0.5% in the September quarter in seasonally adjusted terms, continuing the recent strong run that has seen activity rising to its highest level in 10 years. Today's result was weaker than the market forecast of a 1.8% increase. The forecast was a little closer, at 1.5%.

However, the headline belies a remarkably consistent story of Canterbury residential slowing, the overall trend in non-residential activity being up, and Auckland residential growing strongly.

Residential activity rebounded after a quiet quarter in June, up 2.9% in seasonally adjusted terms. As expected, much of the growth was driven by continued rises in Auckland residential activity, offset by flat activity in Canterbury as the residential component of the rebuild slows. The value of residential construction work in Auckland grew 4.5% quarter-on-quarter, while Canterbury grew just 0.5%.

On the non-residential side, activity was lower after a strong 5.2% rise last quarter. Non-residential consenting and building work tends to be very lumpy. Seeing a small decline quarter-on-quarter after sharp growth is not a huge surprise. Canterbury's non-residential activity this month was broadly flat, down 0.5% in value terms after a 12.5% rise last quarter. 

Auckland was also up by 3.1% in value terms. Year on year, values were up sharply, by 9.2%, underpinned by massive growth in Canterbury. The dominant role of Auckland and Canterbury in non-residential activity growth implies that activity throughout the rest of New Zealand has remained relatively subdued.