March 2012 forecasts

Building
PDF |Tables
Executive Summary
Forecast Story
Background Drivers
Population growth
Financing costs
Availability of labour
Household spending
Government spending
Tourism
Building costs
Residential Building And Property
Residential rents
House sales
House prices
Underlying demand
New dwelling consents
Apartment consents
Alteration and addition activity
Non-Res Building And Property
Non-residential building prices
Commercial building
Miscellaneous building
Education building
Industrial building
Hospital building
Accommodation building
Infrastructure building
How affordable is housing?

Stuck in a holding pattern | Executive SummaryPDF
With a slowing world economy buffeting New Zealand with headwinds, and certain bumps delaying the take-off of the Christchurch rebuild, it seems like those waiting to land at the economic growth party will be stuck in a holding pattern for a while yet. But don't worry, the party will be a welcome release after years of hibernation, and would-be revellers still have enough fuel to circle safely as they wait for it to begin – without undue fear of an impending crash landing.
Forecast Story
It looked touch-and-go for a while in late 2011, but the political response in Europe looks to have prevented the global financial system from plunging into a repeat of the problems seen in 2008/09. Prospects for European and, to a lesser extent, Asian economic growth this year are weaker than we had previously expected, and commodity prices will also ease further until mid-2012. Persistent aftershocks in Christchurch are also hampering the rebuild process, and we now forecast economic growth to remain below 3%pa throughout 2012 and 2013.
Background Drivers
The lingering effects of the uncertainty caused by the European debt crisis will show up in a range of key economic drivers over the next year.  Some of the expected momentum in New Zealand’s economic growth has once again been lost as businesses have held back from new hiring and investment.  The unemployment is set to remain above 6% throughout 2012 and most of 2013.
Population growth
A softening Australian labour market and rising job availability in New Zealand will push up net inward migration in the coming years, but not before a significant outflow in the early stages of 2012.
Financing costs
The combination of surprisingly weak inflation, uncertainty from Europe, and patchy domestic economic indicators will keep the official cash rate at 2.5% throughout this year.

Recent releases

Building
Migration 21/05/2012
Apr 12 | annual (net): -4,006
Building / vehicle costs 17/05/2012
Mar qtr 12 | residential a.p.c: 2.4%
House sales 10/05/2012
Apr 12 | a.p.c: 13.8%
House prices 10/05/2012
Apr 12 | a.p.c: 3.1%
Non-residential building 30/04/2012
Mar 12 | value a.p.c: -13.0%
New dwellings 30/04/2012
Mar 12 | excl. apart a.p.c: 33.1%
Monetary policy 26/04/2012
Apr 12 | OCR: 2.50% (prev. 2.50%)
CPI - inflation 19/04/2012
Mar qtr 12 | a.p.c: 1.6%
Residential rents 16/04/2012
Mar qtr 12 | a.p.c. 2.9%
GDP 22/03/2012
Dec 11 | production a.a.p.c: 1.4%
Work put in place 5/03/2012
Dec qtr 11 | total real q.p.c: 2.9%

MigrationRecord outflow on weak labour market 21/05/2012
Apr 12 | annual (net): -4,006
Permanent arrivals to New Zealand dropped 15% between March and April (seasonally adjusted). Although some pull-back was anticipated, this drop took monthly arrivals to their lowest level since November 2005. With the domestic labour market weaker than we had allowed for, the Australian labour market stronger, and global uncertainty rising, net migration could remain negative for the remainder of 2012.
Building / vehicle costsHigh dollar holds down capital costs 17/05/2012
Mar qtr 12 | residential a.p.c: 2.4%
The capital goods price index was unchanged between December and March, as a 7.1% lift in the New Zealand dollar pushed down the cost of imported equipment and materials. However, cost pressures are beginning to rise in the residential building industry as activity rises. We expect capital good prices to push upward over the rest of the year, with a lower dollar and rebuilding in Christchurch the main drivers.

Articles

Articles
Keeping tabs on Christchurch’s population – update May 16
(16/05/2011)
Keeping tabs on Christchurch’s population – update April 21
(21/04/2011)
Keeping tabs on Christchurch’s population – update April 1
(1/04/2011)
Keeping tabs on Christchurch’s population – update March 25
(25/03/2011)
Keeping tabs on Christchurch's population
(22/03/2011)

World data
US building / property
- February 12 (22/05/12)
Aus housing finance
- February 12 (22/05/12)
Aus new dwellings
- February 12 (22/05/12)
Aus house prices
- December qtr 11 (13/04/12)

Christchurch’s population loss 21/12/2011
Christchurch’s population shrank by 2.4% over the year to June, a result that was not as bad as some initial guesses at a population loss of around 4% following February’s earthquake.  This article summarises the population movements, looks at where people have gone to, and examines what is likely to happen to population growth in the city over the next couple of years.
Keeping tabs on Christchurch’s population – update August 16 16/08/2011
This article updates trends in the re-enrolment of school students from Christchurch and surrounding areas following the quake in February.
Building articleUS Building & Property - February 2012 22/05/2012
A brief overview of residential building and property trends in the US.