Rise in construction work in Q1

Digger on construction site.

According to Stats NZ, building work put in place was much stronger in March 2019 than expected.

Total building volume rose by 6.2 percent from last March, the biggest increase since the 6.5 percent rise in the March 2016 quarter.

The increase was driven by a 9.0 percent increase in non-residential building activity. Activity in both residential and non-residential projects reached record highs, which is alarming given the limitations, productivity issues and company failures the construction industry has been dealing with.

“The extent of the Q1 increase is remarkable given reported capacity constraints and the poor productivity track record of the construction sector,” said Mark Smith, senior economist at ASB, in an Economic Weekly report.

“It is likely that more labour and capital resources were deployed to generate extra building work, which will likely exacerbate capacity constraints in other sectors.”


Of the non-residential building types, accommodation projects grew by $248 million (up 40 percent nationally from March last year). The only project type with more growth was shops, restaurant and bars, which was up $337 million (41 percent).

The national value of building work was $6.1 billion, driven mainly by Auckland (up 26 percent) and Waikato (up 30 percent). Canterbury was the only region which had a decrease in its value, down 1.0 percent.