The forecaster said the building downturn in New Zealand, particularly in the residential sector, is being agitated by the domestic recession and deepening global downturn. BIS Shrapnel has forecast building activity in New Zealand to remain weak in 2009, constrained by delays in, or the cancellation of, business investment and expansion plans. The forecaster said the housing market would also remain subdued due primarily to job insecurity, rising unemployment and tighter bank lending policies.Adeline Wong, author of a BIS Shrapnel report called “Building and Construction in New Zealand 2008-09 to 2014”, said she expected the building sector in New Zealand, including residential and non-residential activity, to contract by almost 20% this financial year.“We expect weak dwelling approvals to persist for the whole of 2009, before a modest rebound in the March quarter of 2010,” Wong said. “Thereafter, a combination of strengthening economic growth, low interest rates, improving home affordability, pent-up housing demand, higher net overseas migration levels and an expanding housing stock deficiency, will drive a strong rebound in dwelling consents in 2010-11 and 2011-12, before stabilising over the following two years to 2013-14,” she said.Wong said the silver lining was that, in the short term, the commercial sector will hold up for at least another year, as commercial projects that are more advanced in their construction stages will be completed. She said the civil engineering sector would also provide a buffer to the construction sector through increased spending on infrastructure over the next five years and this would see the civil engineering sector expand by more than 10% per annum over the next two years. “This extra spending will enable the completion of projects under construction and also fast track new projects,” Wong said.