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Value of Building Work Put in Place: June 2009 quarter
Embargoed until 10:45am  –  08 September 2009
Commentary

Residential buildings

The seasonally adjusted volume of residential building work fell 6.5 percent in the June 2009 quarter, the seventh consecutive fall. The volume is now 36.4 percent lower than it was in the September 2007 quarter.

The seasonally adjusted volume of residential building work put in place for the June 2009 quarter is the lowest recorded for seven years. 

 Graph, Residential building work quarterly values at September 1999 quarter prices.

The trend indicates that the volume of residential building work has decreased over the latest seven quarters, falling by 35.9 percent over this period. Over the last three quarters the rate of decline has eased.

Construction prices for residential buildings, as reported in the Capital Goods Price Index: June 2009 quarter Hot Off The Press, fell 0.3 percent in the June 2009 quarter, the third consecutive fall. These quarterly falls were the first since the December 1998 quarter. The latest fall was driven by lower labour rates, and contractors' margins in the construction of apartment buildings.

The seasonally adjusted value of residential building work, in current prices, fell 6.7 percent in the June 2009 quarter.

Graph, Residential building work quarterly values.

The trend, in current prices, for residential building work put in place has decreased over the latest seven quarters, following a period of increases from the September 2006 quarter. 

Graph, Building work put in place quarterly trend values.

For the June 2009 year, the value of residential building work put in place was $6,373 million, down 24.3 percent from the previous June year. Of this total, new dwellings fell $1,997 million (28.5 percent).

Non-residential buildings

The seasonally adjusted volume of non-residential building work fell 2.5 percent in the June 2009 quarter, following a 0.7 percent decrease in the previous quarter. In contrast to residential buildings, the trend for non-residential building work has remained stable. 

Graph, Non-residential building work quarterly values at September 1999 quarter prices.

Construction prices for non-residential buildings, as published in the Capital Goods Price Index: June 2009 quarter, fell 1.1 percent in the June 2009 quarter. This fall was driven by lower labour rates, and contractors' margins.

Graph, Non-residential building work quarterly values.

For the June 2009 year, the unadjusted value of non-residential building work put in place was $5,314 million, up $247 million (4.9 percent) from the previous year. The largest contribution to this increase was from miscellaneous buildings, up $247 million (17.3 percent), boosted by work put in place on sports stadiums, justice system buildings, and offices. Partly offsetting the increase in miscellaneous buildings was a $126 million decrease from hospitals and nursing homes.

All buildings

The seasonally adjusted volume of all building work fell 4.5 percent in the June 2009 quarter, the sixth successive quarterly fall. These quarterly falls were mainly driven by falls in the volume of residential building work. For the first time since 1989, when this series began, the seasonally adjusted volume of residential building work put in place has fallen below the volume of non-residential building work put in place.

The trend indicates that the volume of all building work fell 2.8 percent in the June 2009 quarter, and by 21.4 percent since the December 2007 quarter. 

Graph, Building work put in place quarterly trend values at September 1999 quarter prices.

The seasonally adjusted value of all building work, in current prices, fell 5.3 percent in the June 2009 quarter, following falls in the previous five quarters.

For the June 2009 year, the unadjusted value of all building work put in place was $11,687 million, down 13.4 percent from the previous year. Residential buildings contributed 54.5 percent of this value, down from 62.4 percent in the June 2008 year.

According to the Quarterly Employment Survey: June 2009 quarter Hot Off The Press, the number of paid hours fell 1.0 percent in the construction industry for the June 2009 quarter compared with the March 2009 quarter. The total number of filled jobs rose 6.3 percent in the same period.

Sampling errors

Estimates for the value of building work put in place are derived mainly from a sample survey and are therefore subject to sampling errors. The sampling errors for the June 2009 quarter are: 
 
Sampling errors
  Percentage of total value of work put in place
Residential buildings 4.0
Non-residential buildings 3.6
All buildings 2.7
 
The sample is designed to produce statistics at the 95 percent confidence interval limit. This means that for all buildings, for example, there is a 95 percent probability that the true value of work put in place this quarter is within plus or minus 2.7 percent of the published estimate.

Non-response imputation

For building projects where no survey response is received, Statistics New Zealand imputes values for work put in place, based on responses for comparable projects. The values imputed for the June 2009 quarter are:
 
Non-response values imputed
  Imputed values $(million) Percentage of category value Percentage of all buildings value
Residential buildings 245 17.1 9.0
Non-residential buildings 124 9.7 4.6
All buildings 369 13.6 13.6

 

Excluded consents

Consents valued below $5,000 are excluded from statistics for the value of building work put in place. The value of excluded consents is estimated to be less than 1 percent of published values.

Low-value consents

These comprise residential building consents valued from $5,000 up to $45,000, and non-residential building consents valued from $5,000 up to $80,000. For these consents, it is assumed that:
  • the consent value represents the value of work put in place
  • consented work will be done during the month following the issuing of the consent.

Low-value jobs are therefore valued directly from consents (after a one-month lag), rather than by postal survey. Values included for the June 2009 quarter are:

Low-value consents included
  Low-value consents $(million) Percentage of category value Percentage of all buildings value
Residential buildings 78 5.4 2.9
Non-residential buildings 60 4.7 2.2
All buildings 138 5.1 5.1

Next release ...

 Value of Building Work Put in Place: September 2009 quarter will be released on 8 December 2009.

For technical information, contact:
Bill Humphrey or Tehseen Islam
Christchurch 03 964 8700
Email: info@stats.govt.nz

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