New Zealand’s Sputtering Economy Highlighted by Concrete Slump

(Bloomberg) -- 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% to 3.88 million cubic meters in the 12 months through September, Statistics New Zealand said Tuesday 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% in the second quarter and most local economists are tipping a further contraction in the three months through September. The Reserve Bank 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% on Nov. 27.

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