-- Westpac said that while the amount of planned building work has lifted, headwinds in New Zealand's building sector are mounting, according to a Friday report by the bank.
The bank said the Middle East conflict has resulted in a sharp rise in fuel costs and related increases in materials costs in the construction sector, with some increases described as substantial, while uncertainty and upward pressure on borrowing costs have also risen as inflation pressures have increased.
Westpac said developers are likely to be cautious about initiating new projects given sluggish price growth and the broader headwinds, with the recent uplift in activity potentially giving way to renewed softness later in the year. However, a lift in consent numbers over the past year is expected to see building activity trend higher over the next few months.