Council heralds construction lift
Tuesday 22 January 2013
Auckland’s council says signs of increasing activity in the city’s construction sector indicate more sustained economic growth ahead for the region.
Auckland Council’s chief economist Geoff Cooper said construction activity had been flat since the end of 2008.
But the number of residential consents rose 5% in the three months ended September 30, 2012, from the previous quarter and were up 27% on 2011.
Economic activity in the construction sector rose 3.6 per cent in the same period.
Cooper said residential consents were an important lead indicator of economic activity.
“After a long period of sluggish activity, the construction sector is showing signs of awakening and that’s likely to lead to stronger growth for Auckland’s economy as we progress through 2013.”
He said for every dollar spent in the construction sector, $1.60 was generated for other parts of the economy.
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House prices may start to taper off in the coming years as supply finally starts to meet demand - but no one should be holding out for a huge price correction.
Booming commercial property sector could offer alternatives to investors worried about what lies ahead for the residential property market.
The Reserve Bank says more official cash rate cuts are likely as it fights to get inflation into its target range.