The volume of building work in New Zealand stood at 8.3 billion NZ dollars (5.14 billion U.S. dollars) in the March 2024 quarter, down 4.0 percent compared with the December 2023 quarter, amid increasing construction costs, according to figures released by Stats NZ today.
The volume of residential building work dropped 4.8 percent to $5.2 billion and non-residential building work decreased by 2.8 percent to $3.0 billion over the same period.
“The total volume of building work in the March 2024 quarter was the lowest quarterly volume in the past two years,” construction and property statistics manager Michael Heslop said.
The volume estimates are seasonally adjusted and remove the effects of price changes and typical seasonal patterns.
“The fall in building activity coincided with a 2.8 percent decrease in the retail sales volume of hardware and building supplies in the March 2024 quarter,” Heslop added.
“The fall in residential building activity reflects the decreasing number of building consents for new homes in the construction pipeline.”
The annual number of homes consented peaked in the year ended May 2022 and has been falling since then.
The value of building work put in place was $36 billion in the year ended March 2024, up 3.8 percent from the year ended March 2023, Stats NZ said.
Value estimates of building work put in place, in contrast to volume estimates, include changes to building costs over time (such as material and labour costs).
“The annual value of building work in the year ended March 2024 was up, but this also includes the increase in construction costs over this period,” Heslop said.
In the past 12 months, residential construction costs increased by 3.9 percent and non-residential costs increased by 4.6 percent.
Construction growth in New Zealand has slowed since mid-2022 due to cost pressures and economic constraints. New Zealand’s construction industry, is the fifth largest industry, producing 6.3% of the real Gross Domestic Product (GDP), according to the country’s Ministry of Business, Innovation & Employment.