Otago builders are hurting from a lack of work, forcing many to lay off staff, the Registered Master Builders Federation said yesterday in the wake of statistics that suggest the industry is back in recession.
Sixty-nine residences worth $22 million were built in Otago in December, compared with 105 worth $33 million in December, 2009, figures released by Statistics New Zealand yesterday showed.
Nationally, residential building consent values have hit the floor, with Statistics New Zealand yesterday releasing the lowest figures for a December since records began in 1965.
Consents issued were 27% below those a year ago and nearly 60% below the industry peak of 2004.
"In December 2010, consents were issued for 994 new homes, including apartments," Statistics NZ business statistics manager Louise Holmes-Oliver said yesterday.
"This is the first time the number has dropped below a thousand in a December month since the series began in 1965."
Economists said the results indicated construction was again in recession.
ANZ head of market economics and strategy Khoon Goh said yesterday's results showed building consents were "at a depressing level and probably cannot get any worse".
While the fall in house sales during the middle of 2010 had foreshadowed a fall in consents, the plunge in December had been a surprise, he said.
"Such weakness suggested there would not be much new dwelling construction activity during the first half of 2011.
While we do not subscribe to the notion that there is a housing shortage at present, we will start to very soon if consents continue to be weak."
Registered Master Builders Federation Otago branch president Mike Fahey said yesterday the downturn was hurting local builders and most were probably "getting by" on repair work.
"It probably has gone on a lot longer than anyone estimated.
They told us that last year was going to be one of the lowest years and that we'd be having a bit of a dip, but it's kept going on and on.
"A few builders have had to lay some guys off, because there's nothing for them to go on to.
"It still appears to be pretty quiet around town.
Talking to builders in Alexandra and Wanaka, and they don't have much on, either," Mr Fahey said.
The continuous downward trend for new residential building consents was "one of concern", Registered Master Builders Federation chief executive Warwick Quinn said yesterday.
"Since March 2010, all cost-related announcements that influence construction have been negative.
Increased costs such as GST, higher interest rates, the impacts of the emissions trading scheme, changes to property tax, higher wood, concrete and steel prices and a struggling wider housing market have combined to deter consumers from building new homes," Mr Quinn said.
He said it would remain flat "for some time", until the recovery was entrenched and investors and consumers confident with the stability of the wider economy.
Statistics NZ figures showed the value of residential building consents fell 26% in December from a year earlier to $386 million.
Non-residential consents dropped by 18%, to $332 million.
