Non-residential work drives construction growth

Auckland construction volume has increased and has mostly been driven by work on non-residential buildings, according to Stats NZ’s figures for the December 2018 quarter.

The national volume of building activity increased by a seasonally adjusted 2.7% in the last quarter compared to the September 2018 quarter, and was driven primarily by work on shopping malls and storage buildings. According to construction statistics manager Melissa McKenzie, this was the biggest quarterly increase in construction activity in almost three years.

“Growth in commercial construction activity was driven by more work on shops and accommodation buildings, particularly in Auckland,” McKenzie stated.

“The value of non-residential building in Auckland was up almost 10 percent in the December 2018 quarter, after adjusting for typical seasonal patterns. This change in value reflected changes in both the volume and the costs of construction.”

Non-residential construction prices rose by 1.2% in the December 2018 quarter, and the construction of accommodation buildings such as hotels, boarding houses and prisons was up by $212 million – a 78% increase on the 2017 year.

Residential construction also continues to tick along, with residential work rising by a seasonally adjusted 1.2% from the September quarter. This shows little change from the 1.3% growth recorded that quarter.

Residential building work accounts for approximately 60% of total building activity volume.