With the housing market stuck in its endless 2-year winter, and interest rates not yet at enticing levels, the construction sector continues to struggle. Data from StatsNZ last week showed total building activity fell 1.8% over the June quarter, nearly double the contraction that had been expected.
Falls in activity came from both the residential and non-residential sector where building work declined 2.9% and 0.4% respectively. Residential building consents - which typically lead actual construction activity - have started to lift off their lows. However, they remain more than 30% below their COVID-era highs, underscoring the significant depth of the downturn seen across the industry over the past few years.
For now, the construction sector is still in a period of stabilisation rather than recovery. However, as more rate relief filters through and the housing market begins to stir with the arrival of spring, the construction sector should gradually regain some momentum.
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