"Every month of very low consent issuance adds more down side risk to our already weak near-term construction outlook. Nonetheless, the extent of damage in Canterbury means that a significant amount of construction activity will take place in the years ahead."
Statistics New Zealand figures showed total residential building consents were low, falling a seasonally-adjusted 9.7% in February from those issued in January. The February 22 earthquake disrupted activity in Canterbury, where building consents fell 20% from January.
Mr Tennent-Brown said Statistics NZ was unable to identify how much of the drop-off in residential consents in the Canterbury region was due to the quake, but all consents authorised during the month had been included in the data.
Canterbury's 20% drop confirmed that the ability to process consents was disrupted.
"Earthquake-related consents from the September quake have not shown up to any significant degree in consents for the months from September to January.
"The increased scale of destruction following the February quake now means repair work is unlikely to get under way in a meaningful sense until late this year and it could be several months before we start to see quake-related consents in the data."
The level of Christchurch consents could drop further in the aftermath of February's quake, given building plans could be delayed and processing disrupted, he said.
Beyond Canterbury, building consents remained weak, with nationwide consents, excluding Canterbury, dropping 7.9%. The number was the lowest recorded in the ASB data, which went back to 1991, Mr Tennent-Brown said.
The nationwide weakness in residential consent issuance did not bode well for residential construction in the coming months. ASB expected such issuance to improve gradually over the year.
"If consent issuance remains at the current low levels, there is a significant risk of a housing shortage in areas where the population is growing and more homes will be required in the years ahead."
Non-residential consent issuance was low for most of last year and that continued into the February data, he said. The value of consents in the three months to February was down 13.5% on the previous corresponding period.
As with residential, the level of non-residential consent issuance created a bleak outlook for the construction sector.
However, non-residential consent issuance was expected to recover slowly this year, with earthquake repairs and gradually recovering investment elsewhere providing a boost.
Activity next year should be considerable as reconstruction activity increased, Mr Tennent-Brown said.
