Latest figures from Statistics New Zealand (SNZ) show the seasonally adjusted volume of residential building work put in place in the September quarter was the lowest since June 2002.
While the fall-off in house building continues, one analyst says there are fears 35,000 jobs could be lost in the construction sector.
Goldman Sachs JBWere analyst Shamubeel Eaqub says the outlook for the construction sector was “very weak”.
“As activity weakens in the sector the prospect of job losses is intensifying,” he says.
Mr Eaqub estimated the sector to be over-staffed by about 35,000 workers, more than the 33,000 increase in jobs in the sector during the past five years.
Potential unwind a source of risk for economy
“Given the construction and housing-related sectors (directly through financial services for example, and indirectly through retail sales) have been such significant contributors to employment growth in recent years, the potential unwind is a source of risk for the economy,” he says.
“The domestic recession is clearly worsening and we expect this to be compounded by a global recession.”
The data published by SNZ showed that in the latest quarter the seasonally adjusted volume of residential building work put in place fell 7.9%, while in the past year the volume of residential building work fell 22.1%.
The volume of residential building work put in place has been falling since the most recent peak in September 2007.
For the year ended September 2008, the unadjusted value of residential building work put in place was $8 billion, down 3.5% from the previous September year.
The seasonally adjusted volume of non-residential building work rose 5.8% in value in the September quarter, following falls in the previous two quarters.
In the latest quarter, a higher-than-usual number of building jobs each had a value of more than $10 million, principally in the commercial buildings category, according to SNZ.
Non-residential work increases
For the September year, the value of non-residential building work put in place was $5.2 billion, up 6.3% from a year earlier, with commercial building up 15.5%.
For all building work put in place, the seasonally adjusted volume fell 2.1% in the September quarter, the third successive fall.
For the year ended September, the unadjusted value of all building work put in place was $13.2 billion, up 0.1% from the previous September year.