The New Zealand construction sector remains in the doldrums operating significantly under capacity with competitive tender pricing and low growth in construction costs expected to remain for some time, according to an international construction consultancy.

Dr Andrew Wilson, senior economist and Australia/New Zealand research and development manager for Davis Langdon said planned construction activity In New Zealand remains subdued according to data released today by Statistics New Zealand.

“The number of new dwellings, excluding apartments, authorised in May fell by 9.5 percent compared to the previous month and, although it was 40 percent higher than for the same month in 2009, it comes off a very low base,” he said.

“Although the total number of dwellings authorised so far in 2010 is 27 percent higher than for the same period in 2009, activity remains significantly below the levels recorded for New Zealand over the previous two years.

“Total dwelling activity in 2010 is 27 percent lower than 2008 and 35 percent lower than for the same period in 2007.”

Davis Langdon said the latest figures showed that the value of non-residential construction authorised in May was 12 percent below that recorded for the previous month and 28 percent below the activity for the same period in 2009.

Total building consents authorised in 2010 are 1.8 percent above that recorded for the same period in 2009 but remain significantly below the levels recorded for the 2 years previous to that, said Dr Wilson.

 “A sustained revival in building activity remains dependant on continued strengthening in local and international economic activity and population growth,” said Dr Wilson.

Davis Langdon is represented around the world and has offices in Auckland, Christchurch and Wellington.

For further information, contact Meaghan Jones on +61 3 9933 8800 or email mjones2@davislangdon.com.au