Economist says March decline was much worse than people expected
The property market went downhill amid the COVID-19 crisis, and so did the building sector. Statistics New Zealand's latest report has confirmed that the building sector had started seeing the impacts from the pandemic even before the lockdown.
Stats NZ's latest figures found that building activity in the March 2020 quarter dropped by 5.7% compared to that of the December 2019 quarter. Residential building activity fell 5.8% and non-residential 5.6%.
Dave Adair, the acting building statistics manager at Stats NZ, said the latest figures had partly reflected the lockdown, which started in the last week of March.
“In the end, many respondents are unsure as to how successful their building projects will be since it all depends on the currently unknown future health of supply chains, the labour force, and various markets,” Adair told Stuff.
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Andrea Beattie, an economist at Infometrics, commented that the lockdown hit the construction sector's confidence further – with the June quarter lacking any construction activity. However, she believes hope is not lost yet as residential and non-residential activities still performed better than what economists expected.
“Many consents were still processed during the lockdown, but we expect less translation into actual builds as nerves remain about the property market and prospects for the economy, with non-residential activity likely to be most affected by projects not going ahead,” Beattie told Stuff.
ASB senior economist Jane Turner believes otherwise, saying the March quarter decline was much worse than most economists expected, and a 35% quarter-on-quarter fall in June is most likely to occur.
