Christchurch outlook dims as politicians dither
In the city meant to be leading New Zealand out of recession, builders’ expectations are falling.
Building construction workload optimism for the Christchurch rebuild has dropped from an average of 85% during 2011 to 63%.
Expectations still remain well ahead of Auckland and Wellington, and several new commercial developments are under way or at planning stages.
But major residential repair work beyond plastering and painting has yet to begin. Many insurance claims are still to be settled by EQC as the second anniversary of the first September 2010 earthquake approaches.
A survey by Davis Langdon, an AECOM company, attributes the decline to “frustration with the protracted Christchurch Central City Blueprint process is adding to the uncertainty for investors”.
The dithering continues this week, with Earthquake Recovery Minister’s Gerry Brownlee’s Friday deadline for the 100-day rebuild blueprint delayed until next week.
Davis Langdon’s New Zealand regional director, Chris Sutherland, says the outlook in Christchurch remains consistent with the trend observed over the last year.
“One respondent described the impasse between commercial developers and prospective tenants as a stalemate caused by the inability to commit to new projects while the Christchurch CBD remained little more than a construction site.”
The survey is based on the views of 600 building construction industry decision-makers, including consultants, contractors, financiers, agents, developers and others from across the public and private sectors.
Mr Sutherland says while current conditions are still fairly poor, there is evidence of a positive upswing in the industry’s outlook for the coming year.
“Eighty-five percent of New Zealand construction industry decision-makers anticipate stable or increasing workloads over the next 12 months, up from 80% in December.
“Optimism is also strong in Auckland, where 36% now expect more work over the coming year, up from 28% in the previous quarter.”
He says existing building refurbishments were selected by 76% of decision-makers as a key source of new work.
Many respondents indicated that continually low margins were putting some companies in financial difficulty or causing them to fail.