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Building consents rise 8.4%

Thursday 30th October 2008

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New Zealand building consents rose in September on a jump in apartment approvals. Excluding apartments the number fell 0.8%.

Some 1,635 consents were approved last month, Statistics New Zealand said. Apartment approvals more than doubled to 366. The trend for the number of new dwellings, including apartments, has fallen 41% since mid-2007 to the lowest since January 1983.

The underlying trend in building consents is "extremely weak," according to Goldman Sachs JBWere's Shamubeel Eaqub, and the outlook for the construction sector "remains very challenging."

Shares of Fletcher Building, the nation's largest construction company, fell about 2% to $5.50 and have tumbled more than 50% this year amid a domestic recession and slumping demand in the US The central bank may add to its 1 percentage point cut in the official cash rate with a further 50 basis points reduction in December, Eaqub said.

The value of consents for non-residential buildings in September was $450 million, the second-highest monthly total since November 2005, reflecting four major approvals worth more than $19 million apiece.

By Jonathan Underhill

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