NZ: Volume of building work put in place increased 0.8% in Q2 - ANZ

Liz Kendall, Senior Economist at ANZ, notes that the New Zealand’s volume of building work put in place increased 0.8% q/q, reversing a 0.8% fall in Q1 to be up 3.8% over the year. 

Key Quotes

“This stabilisation is well below what we expected (and market expectations of a 2.9% q/q increase). Nominal activity increased 1.8% q/q to be up 8% y/y.”

“The volume of residential work increased 0.5% q/q, after falling 0.5% in Q1. This was below expectations, despite solid consent issuance early in the year, and is consistent with a construction industry that is struggling to achieve higher levels of activity, despite strong demand. Non-residential volumes increased 1.2% q/q, following a 1.4% fall in Q1.”

“Today’s figures present downside risk to our provisional Q2 GDP estimate of 0.8% q/q (2.6% y/y).”

“Despite today’s softer outturn, Q2 GDP looks like it will paint a picture of temporary strength. The GDP outlook looks softer into the second half of the year.”

“Building work has stabilised at a high level and there are tentative signs the pipeline may be softening.”