8 Jun 2020

Building work dropped more than 5% in March quarter

12:05 pm on 8 June 2020

The amount of building work sharply dropped in the March 2020 quarter, partly due to the Covid-19 lockdown.

Two builders in yellow and orange at the construction site

Overall building activity fell 5.7 percent in the latest quarter. Photo: 123RF

Stats NZ figures show overall building activity fell 5.7 percent in the latest quarter, following a 0.9 percent fall in the December 2019 quarter.

Residential building volume fell 5.8 percent in the March quarter and non-residential fell 5.6 percent.

Building statistics manager Dave Adair said at least four working days were lost due to the Covid-19 lockdown came into effect at 11.59pm on Wednesday 25 March, and activity was likely to have eased in the days leading up to lockdown.

"Building activity has been generally growing for about eight years, initially driven by the Canterbury earthquake rebuild, then by developments in Auckland," Adair said.

"The level of activity has flattened in recent quarters, after running at historically high levels for about four years."

Industry sentiment negative since lockdown

" We can expect the lockdown to have a more significant impact on the June 2020 quarter as virtually all construction work stopped until at least 28 April with the move to level 3 restrictions," Adair said.

Survey respondents were asked to note any factors that might influence their building projects, including Covid-19 and the lockdown, giving an insight into their experiences and expectations.

Almost all who included a comment said a delay was the most likely factor to influence their projects. Other factors of concern included:

  • financial problems (20 percent)
  • limited availability of supplies (5 percent)
  • reduced productivity (less than 5 percent)
  • limited availability of workers (less than 5 percent)
  • reduced market confidence (less than 5 percent).

Many were still uncertain as to the true implications of Covid-19 but it was clear most were anticipating some negative implications, Adair said.

"In the end, many respondents are unsure as to how successful their building projects will be since it all depends on the currently unknown future health of supply chains, the labour force, and various markets," Adair said.

Around 1110 of those who responded provided a statement about Covid-19.

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