New Zealand’s sputtering economy highlighted by concrete slump

NEW Zealand’s concrete production slipped to the lowest level in nine years, highlighting a construction slowdown in a sputtering economy.

Output fell 9.3 per cent to 3.88 million cubic metres in the 12 months to September, Statistics New Zealand said on Tuesday (Nov 12) in Wellington. That’s the weakest annual reading since the third quarter of 2015.

The construction slowdown is adding to signs that economic growth has stalled, and that the nation is facing its second recession in less than two years. Home-building approvals dropped to an almost six-year low in mid-2024 as high interest rates made people less inclined to buy new homes and businesses reluctant to invest in new offices and warehouses.

Almost half of firms in the building industry surveyed in the third quarter by the NZ Institute of Economic Research expected profits to fall as demand slows.

Gross domestic product declined 0.2 per cent in the second quarter and most local economists are tipping a further contraction in the three months to September. The Reserve Bank of New Zealand began cutting rates in August in recognition that inflation was slowing in a sluggish economy. It is expected to ease the Official Cash Rate by 50 basis points to 4.25 per cent on Nov 27.

Concrete production has slowed from an annual peak of 4.8 million cubic metres in late 2022, today’s report showed. BLOOMBERG