Due at 2245GMT, New Zealand - building work done for Q2
- expected 1.6% q/q after Q1s surprise fall, -3.5%
Previews ...
ANZ:
- Building work figures are likely to be mixed. We have some sympathy for the argument that the contraction in the volume of total building work in Q1 (-3.5% q/q) was at least in part a weather-related story.
- Certainly the 7.2% q/q drop in non-residential building work volumes was a surprise, and we'd expect that to rebound.
- Residential building work, on the other hand (which fell 0.8% q/q in Q1), is facing a few more headwinds, and we wouldn't be surprised if it dipped a little more in Q2.
- Overall though, the figures are expected to be consistent with the construction sector making a small positive contribution to GDP growth in the quarter.
Westpac:
- Following an unexpected fall in March, we expect the upcoming building work report will show that construction activity rebounded in the June quarter.
- Much of the weakness seen earlier in the year related to non-residential projects, which can be lumpy on a quarter-to-quarter basis.
- With a large amount of construction activity occurring nationwide, we expect a solid rise in non-residential building in June.
- Residential construction is also expected to rise modestly. However, rising building costs, stretched capacity in the building sector, and tighter bank lending standards for property developers are all providing some brake on how quickly building activity ramps up.
