New Zealand house-building and renovation work fell to the lowest level in almost eight years in the second quarter amid the worst recession in three decades, reports Bloomberg.
The value of residential construction excluding inflation dropped 6.5 percent from the first quarter when it declined a revised 0.5 percent, Statistics New Zealand said in Wellington today, citing seasonally adjusted figures. Non-residential construction fell 2.5 percent.
Home construction has slumped by more than 25 percent in the past year as declining consumer confidence and rising unemployment made people reluctant to invest in property. Home- building approvals fell by more than a third in the first three months of the year, adding to signs the economy contracted in the second quarter.
“Construction will be a large drag on gross domestic product again,” said Philip Borkin, economist at ANZ National Bank ltd. in Wellington. “There is potential for there to still be some weakness in residential construction over the remainder of this year.”