NZ: Construction activity falling, housing activity cools - AmpGFX

A factor dampening NZ’s economic growth in the last year has been slowing construction activity, explains the analysis team at Amplifying Global FX Capital. 

Key Quotes

“In fact, construction fell 2.1%q/q in Q1. In particular non-residential building construction slumped in Q1.”

“The decline in construction may have been exaggerated in Q1, but it appears that the construction boom that has driven the NZ economy over recent years is peaking.  Building permits appear to have peaked last year.”

“More optimistic for growth was a surge in machinery and equipment investment in Q1. Potentially boosting productivity, but this is an area of demand that is likely to have been filled by mostly by imports.  This is consistent with solid business surveys.”

“Housing activity cools

Housing data suggests that the RBNZ macroprudential measures are working to cool the market.  Sales and house prices inflation have slowed this year.

Credit growth for housing has also slowed this year, albeit still at a high rate of 8.2%y/y in April, down from 9.1%y/y in December.  Total private sector growth has also cooled to 6.2%y/y.”