4 Sep 2015

Drivers of building activity changing - economist

1:45 pm on 4 September 2015
Christchurch construction.

Industrial and commercial construction in central Christchurch. Photo: RNZ / Alexander Robertson

Official figures show total activity rose 1.6 percent in the three months to June, compared with the previous quarter, with gains in industrial and commercial construction offsetting a decline in house building.

Westpac senior economist Satish Ranchhod said the slowdown in residential building reflected a levelling-off in earthquake repair work in Christchurch.

He said the baton of growth was moving to Auckland, which is suffering from a shortage of houses.

But Mr Ranchhod said meeting that demand should not come at the expense of quality.

"One of the issues that we found during the previous housing boom was that there were a number of lower quality structures put up, and that was one of the problems associated with leaky buildings," he said.

Mr Ranchhod said Canterbury would remain a key region for the construction sector, as the impetus shifted from housing to non-residential work.

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