Bank sees increase in building
A lull in the number of consents for commercial and industrial buildings in Canterbury late last year is temporary, according to ASB Bank, which is forecasting a rapid rise in commercial construction over the next two years.
The bank said the dip in non-residential consents had caused a slight drop in economic activity in Canterbury as measured by ASB's Cantometer, an index which aims to summarise activity in Canterbury since the major earthquakes.
The bank said the Cantometer dipped by 0.1 to 1.1 in January but 1.1 was still a "bright outlook for the region's economy."
Zero on the index is June 2010, just before the earthquakes. Above or below zero means the sector's activity is higher or lower than before the quakes.
The index is made up of five subindices measuring what is driving greater economic activity in the region. The greatest movement is in the construction index with a 3.4 reading in January.
Property listings, hours worked, electricity usage and guest nights are still below zero.
ASB chief economist Nick Tuffley said while the issuing of non-residential building consents was low in November last year, the trend was still increasing.
"We anticipate commercial construction will increase rapidly over the next year or two and that consents will soon rebound from the dip."
Also, the pace of construction cost increases had started to slow.
For the year to December the cost of building a new house in Canterbury increased by 9.5 per cent, slower than the 12.2 per cent in the year to March 2013.
"It doesn't look like cost increases will get out of control and pose serious risks to broader inflation," Tuffley said.
Residential property prices were rising because of a shortage of homes in Canterbury but more new houses being built should ease pressure on the rise in house prices this year, Tuffley said.