Canterbury rebuild will sustain the nation for several years

Christchurch (Source: Apple Maps)

Canterbury’s post-quake rebuild will sustain the nation for several years yet.

An ANZ report scotches the idea the reconstruction is an economic flash in the pan that will end in the next year or two.

Perversely, the delays and frustrations of Cantabrians with insurers, repair companies and the glacial rebuild of the central city will be good for the whole country.

The ANZ report says there is a growing perception the economy will fall into a hole when the rebuild stimulus fades after 2017.

But the authors say the buildup has been slower than expected and will be slower on the downside.

“We suspect the rebuild will take longer, but irrespectiv of thate, people know it will peak in the coming years and this gives them time to adjust and plan accordingly.

“As the rebuild fades, so too will the negative impact of contractionary fiscal policy.

“Christchurch stimulus is currently being offset by fiscal austerity; the fiscal stance has been negative since 2010/11, and the stance is projected to be negative to the tune of 2.4% of GDP over the next four years. That’s a major headwind to the economy.

“The spill-overs from higher construction sector activity will take time to boost other sectors and diffuse through the wider economy,” ANZ says.
The bank also highlights other growth sectors such irrigation in the Canterbury region.

c.hutch@clear.net.nz

This article is tagged with the following keywords. Find out more about My Tags

NZ Market Snapshot

Forex

Sym Price Change
USD 0.7878 -0.0004 -0.05%
AUD 0.9091 0.0005 0.06%
EUR 0.6356 -0.0003 -0.05%
GBP 0.5032 0.0001 0.02%
HKD 6.1123 -0.0013 -0.02%
JPY 92.8410 0.0020 0.00%

Commods

Commodity Price Change Time
Gold Index 1201.1 7.690 2014-11-21T00:
Oil Brent 78.6 -0.120 2014-11-21T00:
Oil Nymex 76.5 0.710 2014-11-21T00:
Silver Index 16.4 0.260 2014-11-21T00:

Indices

Symbol Open High Last %
NZX 50 5526.9 5526.9 5526.9 -0.56%
NASDAQ 4751.0 4751.6 4701.9 0.24%
DAX 9521.2 9736.1 9484.0 2.62%
DJI 17721.0 17894.8 17719.0 0.51%
FTSE 6678.9 6773.1 6678.9 1.08%
HKSE 23353.7 23508.0 23349.6 0.37%
NI225 17285.7 17381.6 17300.9 0.33%