Today’s announcement that the value of building work fell 6.3% in the March 2008 quarter might be bad news for tradespeople but there could be a glimmer of hope in it for those worrying about the high cost of converting to dairying.
Residential building work fell 6.6% (after the removal of price changes and seasonal fluctuations) in the first three months of this year following a decrease of 2% in the December 2007 quarter.
Non-residential building work fell 5.9% in the same period this year, a turn around on the 12% increase in the last three months of last year.
This news will probably be too late to impact on the price for those who’ve already started converting for the 20008-09 season, but if these figures mean a cooling of the building market it might help those planning to convert for the 09-10 season.
Each conversion requires a new shed and usually at least one, and sometimes two or more, houses because dairying requires more labour and hence more accommodation than sheep farms.
I tried to find a regional breakdown of the figures because around 100 Southland sheep farms are being converted to dairying for the 08-09 seasons which will require 100 new sheds and more than 100 houses when calving starts in early August. I’d have expected some of that building to have started in the March quarter and so to have been reflected in these numbers.
The helpful woman at Stats NZ told me they don’t do regional breakdowns for these figures (which show work actually done) but pointed me to this link which showed the value of consents (which are granted but not necessarily used yet) for farm buildings varied from $12m to $19m in 2006; from $17m to $27m last year and this year were $32m in January, $31m, in February, $36m in March and $37m in April.