Commercial construction slows, residential holds up

The volume of work on non-residential buildings fell a seasonally adjusted 4.9 percent in the December 2020 quarter, compared with the September 2020 quarter, Stats NZ said today.

The estimated volume of non-residential construction work fell sharply in the June 2020 quarter after the COVID-19 national lockdown in April. It then bounced back in the September quarter, before dropping again in the December quarter.

Volume estimates show real changes in building activity over time, by accounting for typical seasonal patterns and construction cost changes.

QuarterTotal buildingsResidentialNon-residential
Dec-15250225400014538550001048398000
Mar-16266269400015410010001121692000
Jun-16280863000016340980001174531000
Sep-16282640600016505940001175812000
Dec-16285888600016676560001191230000
Mar-17277865800016610930001117565000
Jun-17277802000016643320001113688000
Sep-17284387900017204940001123384000
Dec-17287302400017084150001164609000
Mar-18284695700017032900001143667000
Jun-18288778100017268700001160911000
Sep-18289346100017331920001160270000
Dec-18298281800017519810001230837000
Mar-19317715300018387590001338394000
Jun-19311717600018400090001277167000
Sep-19311738200018103900001306992000
Dec-19308777800018187860001268992000
Mar-20294093300017160990001224834000
Jun-2023296540001399960000929694000
Sep-20311092200018903840001220537000
Dec-20306378900019036580001160131000

“The volume of commercial building work, including shops, offices, storage, and accommodation buildings, has been running at elevated levels for about three years, but is down from the high point in late 2019,” construction statistics manager Michael Heslop said.

“This reflects both a recent slowdown in some commercial work in Auckland, and a longer-term decline in Canterbury after the high levels seen during the post-2011 quake rebuild.”

In the same period, the estimated volume of residential building work rose slightly, up 0.7 percent in the December 2020 quarter, following a strong bounce-back in the September quarter.

The total volume of building activity has fallen slightly since the September 2019 quarter, but remains at historically high levels. Within this, increases in estimated residential volume have been partly offset by decreases in non-residential work.

“Building work put in place in the December 2020 quarter includes projects consented some months and even years ago, as there is a lag between the building consent being issued and construction happening on the ground,” Mr Heslop said.

“Recently consented new homes and non-residential buildings will be reflected in future quarters.”

See Annual number of new homes consented rises.

These estimates remain provisional due to COVID-19 related measurement challenges. See Methodology for Value of building work put in place: December 2020 quarter.

Commercial building values slow in Auckland and Canterbury

Auckland drove the December 2020 quarter fall in the value of non-residential building work. In Canterbury, non-residential building activity has been generally falling for over four years, as the earthquake rebuild winds down. These value measures are not adjusted for cost changes or seasonal effects, unlike the volume measures which are adjusted.

“Non-residential building activity can fluctuate from quarter to quarter, partly reflecting large commercial projects starting, ending, and some pausing during construction,” Mr Heslop said.

The value of residential building activity grew across all main regions, up 8.1 percent nationally compared with the December 2019 quarter. In Auckland, residential building was near $1.9 billion in the December 2020 quarter, up from about $1 billion five years ago.

See regional data in value of building work put in place: December 2020 quarter.

QuarterAuckland residentialAuckland non-residentialCanterbury residentialCanterbury non-residential
Dec-15982279000496467000641529000492218000
Mar-161059945000505061000618669000457950000
Jun-161201608000626392000628211000529310000
Sep-161242043000611534000646417000552693000
Dec-161281692000703375000601888000506284000
Mar-171229813000530909000562201000463430000
Jun-171280665000670752000533147000464533000
Sep-171382927000713104000566459000431906000
Dec-171391897000679310000565534000469621000
Mar-181389175000632363000500879000440203000
Jun-181447287000793349000487120000380358000
Sep-181599632000792458000489584000448971000
Dec-181619422000879226000521278000430801000
Mar-191639127000902221000510052000421318000
Jun-1916722020001024942000517878000373028000
Sep-1916748860001073343000524313000423180000
Dec-1917026630001033790000554210000384944000
Mar-201519636000864491000499288000349570000
Jun-201307096000721101000416719000228674000
Sep-201849885000894563000564520000352189000
Dec-201872698000811562000587989000345469000

Auckland home builders report increased supply pressures

Respondents for residential building projects in Auckland reported more impact from availability of materials and equipment than those for non-residential building projects, and projects outside of Auckland.

See Increased supply pressures reported for home building projects in Auckland.

/Stats NZ Public Release. This material comes from the originating organization and may be of a point-in-time nature, edited for clarity, style and length. View in full here.