New Zealand building activity slowed in the final three months of 2013 as non-residential work dropped for a second quarter, offsetting a pick-up in house building.
The volume of building work put in place across all building fell 1 per cent in the three months ended Dec. 31, compared to a 1 per cent gain in the September quarter, according to Statistics NZ.
Non-residential work fell 3.9 per cent, adding to the September decline of 6.7 per cent, while residential work grew 1.1 per cent in the quarter, having gained 7.7 per cent in the prior period.
The value of work increased 0.6 per cent to a seasonally adjusted $3.17 billion across all buildings, with a 2.6 per cent decline in non-residential work to $1.27 billion and a 2.5 per cent gain in residential work to $2.01 billion.
On an annual basis, total value of building work put in place rose 16 per cent to $12.47 billion in calendar 2013 from a year earlier, led by a 28 per cent gain in new dwellings worth $6.01 billion. Non-residential building work increased 3.3 per cent to $4.89 billion in the year.
Construction is seen as lynchpin for the local economy this year with the $40 billion Canterbury rebuild expected to ramp up this year.
"Weaker-than-expected building activity presents a clear downside risk to our forecast of 1.1 per cent growth in December quarter GDP," Westpac Banking Corp senior economist Michael Gordon said in a note after the figures were released.
Building activity in Christchurch, where the rebuild is gathering pace, rose a seasonally adjusted 0.7 per cent in the quarter, following a 20 per cent surge in the September quarter. Residential work climbed 6 per cent in the quarter, while non-residential dropped 6.6 per cent.
The figures follow new building consents data last week, which showed a decline in permits to build new housing in January, as apartment and retirement unit numbers dwindled from records in the tail-end of 2013.
Rising property prices, particularly in Auckland and Christchurch, became a headache for the Reserve Bank last year, which was loathe to lift interest rates in response for fear of fuelling demand for an already elevated currency. Instead, the central bank imposed restrictions in October on the level of low-equity mortgage lending banks could undertake as a means to reduce the level of riskier loans.