Wellington's confidence rising

Last updated 05:00 07/04/2014

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Business confidence in Wellington has taken off since the middle of last year, rebounding as the national economy gains steam.

Construction cranes are popping up in the city and jobs are following, as firms plan to invest and hire more.

The latest Wellington Employers' Chamber of Commerce business confidence survey shows a net 53.7 per cent of firms said they expected the Wellington economy to improve over the next 12 months.

About 60.6 per cent expect it to improve and just 6.8 per cent say it will get worse, in the survey carried out in the last half of March.

It is a huge lift in optimism from early last year when confidence was down in the dumps. Business was just 18 per cent net positive in May last year.

In the same month last year, Prime Minister John Key said Wellington was a "dying" city that the Government has no idea how to resuscitate. Confidence was also rattled by the two big quakes last year, and later BP decided to move its 90 people out of the city up to Auckland after damage to its headquarters building.

Wellington Employers' Chamber of Commerce Chief Executive Raewyn Bleakley said the latest survey showed the capital "is on the move".

For example, Wellington Airport's $250 million redevelopment was getting under way, and there were many more cranes on building sites.

"It feels like there is more activity around the place," Bleakley said.

Businesses had show great resilience after the big quakes last year.

"These things do pass and people don't focus on them, particularly because the city reopened quickly, in the main," she said. While BP had left, there was little drift from the city these days.

"And we focus more on the ones that go, rather than the ones that grow," she said.

Xero and other IT firms were growing steadily. There were also more ANZ and CallActive staff moving into the city. Call centre firm CallActive had about 160 staff in Wellington, but aims for 2000.

The film sector was hoping for work on the Avatar sequels to be made in New Zealand by James Cameron, to follow on from the big Hobbit trilogy.

But getting such big projects was hard and attracting regular television program-making would "enhance" the base of work for the sector, Bleakley said.

"That could be permanently here and feed the businesses that have set up for the film industry." She said the Wellington economy had come out of the tail-end of the global financial crisis which hit in 2008.

Some commentators were talking about New Zealand as "the rock star" economy, boosted by a construction boom in Canterbury and high commodity export prices.

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That better national mood was impacting on Wellington too, Bleakley said.

"It's great to see that businesses expect to invest more in plant, equipment and staff over the next 12 months.

"If that is borne out, then I expect there will be a snowball effect through the economy," she said.

A net 27.6 per cent of firms expect to invest in plant or equipment for their business over the next 12 months, down just fractionally from the previous survey in November.

The survey also shows 43 per cent of businesses expect to hire more staff over the next 12 months, just as strong as in November, while just 8.3 per cent expect staff numbers to be cut, much lower than the 15.3 per cent in November.

The survey also asked businesses to rank Wellington City Council's ‘8 big ideas' in order of preference. A clear majority ranked international air connections as their No 1 option.

THINK BIG, WELLINGTON

About to start:

Wellington Airport terminal developments: $250 million.

Summerset's $50m extension at Trentham retirement village.

Underway:

Meridian Energy's $169 million Mill Creek wind farm, expected to put about $45m into the Wellington economy.

Quake strengthening work worth tens of millions a year.

Buildings currently being strengthened include Bats Theatre, Wellington Central Fire Station, the Courtenay Place TAB, the Hope Gibbons Building, and $54m of work on the Majestic Centre.

Large new apartment blocks:

One Market Lane, Clyde Quay Wharf, Elevate,

Other building projects:

Redevelopment of Unisys House on The Terrace to be new Ministry of Social Development head office (opening 2016.)

Redevelopment of NZ Post head office on Waterloo Quay.

Redevelopment of old Defence HQ building in Stout St to be new MBIE head office.

Wellington City Council is half-way through a $400m project to upgrade and strengthen its social housing estates.

IT companies:

Wellington-based Xero added 100 more staff in Wellington to a total of 300.

The Hobbit trilogy: All three Hobbit films were estimated to have cost a total of $676m to make, double the amount spent on the Rings trilogy.

Possible future developments:

James Cameron's Avatar sequels to get at least NZ$125m from taxpayers in return for spending at least $500m making the films.

Proposed redevelopment of the Bowen complex behind parliament.

New Willis Bond development on Kumutoto Wharf, seeking consent.

Proposed Willis Bond planning redevelopment of Farmers and Deka stores at Cuba Mall.

New $100m biological science building at Victoria University.

Basin Reserve flyover: $90 million.

Transmission Gully project: $1 billion.

Wellington Airport runway extension: $300 million.

- BusinessDay.co.nz

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