New Zealand’s volume of building work rises at modest pace in Q3

The volume of building work grew at a more modest rate in the third quarter following strong growth in both the first and second quarter. The volume of total building work put in place rose 1.4 percent in sequential terms in the September quarter, which follows solid growth of 5.7 percent and 5.3 percent in the first quarter and second quarter respectively. Year-on-year growth came in at around 16 percent.

Residential activity mainly drove the rise in the third quarter. Residential volumes were up 2.4 percent sequentially. According to Statistics New Zealand, activity in trend terms has doubled since September 2011. Non-residential volumes remained the same, taking a breather after some strong gains earlier.

In nominal terms, activity was up 3.2 percent quarter-on-quarter, indicating ongoing price rises in the sector. The value of nominal building work was effectively unchanged in Auckland, with countering movements in residential and non-residential work. Meanwhile, building work in Wellington and ex-Canterbury South Island rose sharply by 18 percent and 13 percent respectively in sequential terms.

“On the back of earlier strong manufacturing data, we have lifted our forecast for Q3 GDP growth (due 22 December) to 1.0 percent q/q (from 0.6 percent q/q)”, said ANZ in a research report.

At 05:00 GMT the FxWirePro's Hourly Strength Index of New Zealand Dollar was bearish at -77.962, while the FxWirePro's Hourly Strength Index of US Dollar was highly bullish at 115.597. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex