Rebuild on a roll - survey
Canterbury economic activity is at its highest level, with construction starting to roll, a bank survey says.
A monthly ASB "Cantometer" index for June, released today, showed the index hit a new all-time high of 1.53, compared to the previous high of 1.46 in April.
ASB chief economist Nick Tuffley said the largest improvement in recent data was a first-quarter survey of building work, which showed a strong increase in regional construction.
"Residential construction increased 31 per cent in Canterbury over Q1 (in value terms), while non-residential construction was up 16 per cent."
The index measure is based on five categories - construction, housing, employment, retail spending, and a population-based "miscellaneous" sub-category.
Construction remains the big driver for the Cantometer, with the sub-index measuring 4.1 for June.
The wider index was created as a watch mechanism to check the activity in Canterbury now, compared with before the earthquakes in 2010 and 2011.
Tuffley said clearly the rebuild continued to gather momentum, and recent building-consents data pointed to even stronger activity over coming months.
However, the Canterbury region was seeing some "moderation" in both construction-related wage costs, and construction-cost growth on the residential side looked to have "peaked".
He did not think the Reserve Bank was going to be particularly worried about what was happening.
The issue of residential consents, in seasonally adjusted terms, has eased slightly from the very high levels seen around the turn of the year. But as of April, it was still 36 per cent above levels of a year ago, the survey showed
Other sectors measured in the Cantometer also stood out.
"The encouraging data is not solely construction-related," Tuffley said.
"Over the last year, retail spending has risen by 7.9 per cent in Christchurch - far outstripping the 3.5 per cent increase nationally."
Meanwhile, the latest reading of regional consumer confidence dipped very slightly but was still the second-highest since the earthquakes.
Canterbury's tourism industry also continued to rebound.
Guest nights figures were continuing to climb steadily as lost accommodation capacity was restored.
Christchurch Airport was now the country's fastest growing point of entry for Chinese visitors, a vital growth market, he said.
Elsewhere, the housing sub-index continues to soften gradually. House sales throughout the country had fallen since the RBNZ's mortgage lending restrictions came into effect in October 2013.
The improvement seen in the Canterbury economy is showing no sign of slowing down, Tuffley said.
"The rebuild momentum has taken longer to kick in than initially expected, but recent construction data shows that the ball has really started rolling now," he said.
"This is working to create a healthy economic environment, with very low unemployment and strong growth in spending flowing through to benefit other sectors of the economy."
With building work likely to continue accelerating for several years yet, the outlook was very encouraging, the survey said.