Commercial building shock drags NZ construction lower in Q4 2025

South Island resilience offsets slump in northern construction By Mina Martin 06 Mar 2026 Share New Zealand’s construction sector lost momentum in the December quarter, as fresh data showed a sharper-than-expected drop in building work put in place, driven by a steep fall in non-residential projects while housing activity broadly held its ground. Construction volumes slide, commercial takes the hit Official Stats NZ figures show the seasonally adjusted total building volume fell 3.1% in the December quarter compared with September. Within that, residential building volume slipped 1.1%, while non-residential activity tumbled 6.5%. In current prices, the actual value of total building work was $7.7 billion, down 3.6% from the December 2024 quarter. Residential work edged up 0.6% to $4.9 billion, but non-residential work fell 9.9% to $2.9 billion. Residential and non-residential construction prices each rose 0.8% in the quarter, as measured by the capital goods price index, adding to cost pressures even as activity eases. Economists: housing near a floor, non-residential under pressure Westpac NZ senior economist Satish Ranchhod (pictured) said the weakness in construction was deeper than anticipated. “Building activity was down 3.1% in December. That was lower than our forecast for a modest decline, and well below market forecasts for a 1.9% rise,” Ranchhod said in a Westpac commentary. He noted that the residential sector appears to have stabilised. “Looking back over the p...