Residential construction in Auckland accounted for almost a quarter of all nationwide building activity during 2017, with Auckland’s non-residential construction taking that share up to 38%. So it’s little surprise that the region’s prospects dominate industry commentary.
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Since Labour came into power late last year, its KiwiBuild policy has been shrouded in confusion by contradictory statements from government departments and within the government itself about exactly what the policy means for the construction sector. Phil Twyford, the Minister for Housing and Urban Development, has been adamant that “the overwhelming effect of the KiwiBuild plan will be to deliver new houses over and above what the private market is delivering.” He has been quick to downplay the possible crowding out of private sector work. Furthermore, the government had indicated that part of the policy was to buy some properties “off the plan”, yet Mr Twyford had seemingly contradicted this statement continually reiterated that KiwiBuild would result in an additional 10,000 dwellings being built per year over and above what the market would otherwise have delivered.
We have recently conducted a survey of local councils across the country to gauge how optimistic they are about the employment outlook for their area. The survey asked people involved with economic development in councils about their perceptions of employment growth prospects in their area over the next one and four years.
Economic growth during 2018 is set to fall short of previous expectations, according to Infometrics’ latest forecasts. Infometrics sees economic growth slowing from 3.0%pa currently to 2.6%pa in early 2019, contrasting with the forecaster’s previous expectation of accelerating growth during 2018.
“Labour capacity constraints in the residential construction sector, changes in central government’s infrastructure priorities, and slightly disappointing dairy prices will all weigh on growth this year,” says Infometrics Chief Forecaster Gareth Kiernan.
This Top 10, by Benje Patterson, explores ways of getting into financial health and avoiding debt-traps from spending increases to your home’s ratings valuation.
This month we revisit our article series exploring what makes economists, and those who work in economics, tick.
Daniel Sun was born in China and grew up in Auckland and Christchurch. He has a lively interest in New Zealand and Global economics and current affairs.
We ask Daniel about how he came to work for Infometrics and what he sees in our technology driven future.
We have revised down our expectations for GDP growth during 2018 in our latest economic forecasts (see Graph 1). Our previous forecasts, in October, were upbeat about prospects for the New Zealand economy this year, but a range of factors have combined to see that growth outlook soften over the last few months. These factors include persistent capacity constraints in the construction sector, changes in central government’s infrastructure priorities, and dairy prices that have been a bit disappointing.
This year is shaping up to be one of change for the New Zealand economy. This article concentrates on seven major areas of policy shift and how much change the Labour-led government might achieve in the next 12 months.
“Other construction” activity has been surprisingly weak over the last few years. This article unpicks what goes into other construction work and highlights that the softness might not be due to a lack of spending on infrastructure.
One key infrastructure issue that has arisen since we prepared our last set of forecasts in September and October is the change in focus for transport spending under the new government. Although both National and Labour emphasised the need for investment in infrastructure, National’s attention was very clearly on roads, while the Labour-led coalition is more focused on rail and public transport.