Quakes shrink Canterbury economy

MARTA STEEMAN
Last updated 05:00 23/08/2012

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It's official - the greater Christchurch economy has shrunk by about 10 per cent because of the three big earthquakes.

That's about $1.5 billion less of goods and services produced in the months from September 2010 to June 2011.

That is from the Central City Development Unit, a division of Cera (Canterbury Earthquake Recovery Authority), which comments on its website on the impact of the CBD blueprint on the local economy.

CCDU says: "Regional estimates about the impact of the earthquakes are subject to a degree of error, but it appears that the September earthquake decreased output by about 2.5 per cent-3 per cent.

"The February earthquake shrank the economy by 6 per cent - which is equivalent to the economic impact from severe recession.

"The combined total impact over the September 2010-June 2011 period was a decline in output of about 8 per cent to 11 per cent."

Treasury has estimated that the earthquakes dragged down national GDP by 1.5 per cent.

Greater Christchurch is now growing more quickly than the national economy, CCDU says.

But it is still 4 per cent below where it was in September 2010.

The local economy began growing about nine months after the February earthquake.

"It will take some time to get the economy back to where it was before September 2010, but it is growing quickly - between 1 per cent-3 per cent every 3 months."

A spokesman for Cera said it compiled data from sources such as Treasury, NZIER, Infometrics and the National Bank for its purposes.

Cera was in the process of pulling together economic indicators from a variety of sources which can be published on a more regular basis, the spokesman said.

CANTERBURY FASTEST-GROWING ECONOMY IN NEW ZEALAND

Canterbury's economy is now growing the fastest in New Zealand after dramatically shrinking last year.

That's according to the National Bank's latest regional trends survey.

In the 12 months to June 2012, Canterbury's economic activity was 4.4 per cent higher than in the previous year to June 2011.

That is shown in a variety of data. The region has been selling a lot more houses, buying more new cars, spending more at the shops, and advertising a lot more jobs in the last 12 months than in the 12 months before that.

The only region that came close was Auckland at 3 per cent growth.

Another piece of data on Canterbury reinforces how the economy is beginning to rebound. In the three months to June 30 this year economic activity in Canterbury is 6.1 per cent greater than in the same period to June last year.

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Christchurch economist Robin Clements, of UBS, said the National Bank data showed a strong overall growth trend in the region.

National Bank economist Steve Edwards said Canterbury's pace of growth - 4 per cent to 5 per cent - is similar to that of 2001-2005. But this time it is based on reconstruction rather than "the borrow and spend" of the early 2000s.

The data used in the bank's regional trends survey was domestic.

- BusinessDay.co.nz

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