Satish Ranchhod, senior economist at Westpac, notes that New Zealand’s total construction activity fell by 1.5% in the June quarter and was lower than Westpac’s forecast for a 0.9% rise or the average analyst forecast for a 1.3% increase.
Key Quotes
“The fall in building activity mainly related to non-residential building activity which was down 3.4% over the quarter. Those declines were centred on Auckland. Work on non-residential projects can be lumpy on a quarter-to-quarter basis. The June quarter fall followed very large gains in the past two quarters, and we had been expecting at least some decline.”
“Residential construction was essentially flat in the June quarter. While we did see continued gains in Auckland and Canterbury, activity in other regions was down.”
“While today’s building work report was weaker than expected, other recent data has been firm (including the June quarter retail volumes report). On balance, we continue to expect a 0.5% gain in GDP for the June quarter.”
“Looking at the longer-term outlook, construction activity is set to remain strong over 2019, supported by strength in residential, commercial and infrastructure work. We expect a further step higher in 2020.”
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