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NZ building consents fell to record low in 2011

Tuesday 31st January 2012

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New Zealand building consents fell to a record low in 2011, underlining a slump in activity that has hurt earnings at construction firms including Fletcher Building.

There were 13,662 consents issued for new dwellings last year, down 12 percent from a year earlier and the lowest since Statistics New Zealand began tracking the figures 46 years ago. Excluding apartments, consents fell 15 percent to 12,506. The value of residential consents fell 12 percent to $4.9 billion.

In October, Fletcher Building said housing starts at “historically low levels” would contribute to a 10 percent drop in first-half profit and likely stalling of full-year earnings. The nation’s biggest construction company is set to release its first-half results next month.

“Consent issuance remains weak and continues to point to a very weak construction outlook,” said Jane Turner, economist at ASB.

“Over the third quarter of 2011, we had started to see tentative signs of improving construction demand,” she said. “Weakness in consent issuance over the past two months suggests this momentum may be fading.”

New dwelling consents rose 2.1 percent in December, seasonally adjusted though excluding apartments, consents fell 0.2 percent in the latest month, according to the government statistician.

There were 979 consents issued for new dwellings, excluding apartments, in December, up 7.7 percent from a year earlier.

Consents for apartments rose to 148, including 41 rest-home apartments, from 85 in December 2010.

Consents in Auckland rose 51 percent to 292 in December from a year earlier, while those for Wellington gained 45 percent to 188 and for Canterbury rose 19 percent to 199, while in the Bay of Plenty they fell 25 percent to 44 and in Manawatu-Wanganui declined 29 percent to 34.

ASB’s Turner said building consents add to evidence the central bank doesn’t need to raise interest rates any time soon, especially given the potential for further delays to repairing earthquake damage in Christchurch, which has been hampered by aftershocks.

Earthquake-related consents in Canterbury were valued at $29 million last month, down from $47 million in November.

The value of non-residential consents rose 2.1 percent to $338 million in December from a year earlier.


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