Quake and related jobs crank up economy
Earthquake strengthening has emerged as a multimillion-dollar driver of Wellington's regional economy, according to a new report.
The Grow Wellington Quarterly Economic Monitoring report for the February quarter said there were 2300 more jobs in the construction sector than at the same time last year.
Much of the construction activity is likely to be driven by earthquake strengthening in Wellington as well as employment related to the Canterbury rebuild, the report said.
Wellington City Council's earthquake resilience director Neville Brown said seismic strengthening was Wellington's "hidden industry" with a value that was difficult to assess.
"Most of that is because every strengthening solution is different, but I'd say it would be worth tens of millions of dollars a year . . . we will see that going on for the next five to eight years."
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.
The council's list of earthquake-prone buildings runs to more than 600 buildings. Owners have up to 15 years to bring their buildings up to a minimum of 34 per cent of the building code.
Wellington Employers' Chamber of Commerce chief executive Raewyn Bleakley said moves by the Government to allow building owners 20 years to comply with the code would give greater certainty around timeframes.
"Wellington City Council's offer of rates relief for buildings not earning an income during strengthening, consent fee subsidies, and changes to development contributions payments will encourage strengthening projects to proceed," she said.
The council itself has liabilities which include around $60m to strengthen the Town Hall, although cheaper options are being investigated.
It is also nearing halfway of a $400m programme to upgrade and strengthen its social housing estates.
Opus Wellington region manager Simon Hatherill was in no doubt that Wellington's seismic strengthening sector was worth tens of millions of dollars annually.
"It would absolutely be that much, not to mention the contracting cost and everything else that goes into strengthening a building."
Hatherill said an emerging market was for engineering companies to partner contractors to create a "one-stop shop" offering seismic solutions to building owners.
"It is becoming quite a little industry to sell to clients."
Opus is involved in earthquake-related markets such as providing "quick response action" after an earthquake.
"Transpower, for example, asked us to be on their sites within half an hour, if at all possible, to assess their buildings."
The December 2013 NZIER Quarterly Survey of Business Opinion found that a net 30 per cent of employers were having difficulty recruiting skilled labour.
Brown said he had noticed an increase in job vacancy adverts for skilled trades. "To me that's an indication of a buoyant economy across a number of sectors, and there are skill shortages starting to creep in."
Hatherill said Opus had always found it difficult finding structural engineers with seismic strengthening ability.
"That is a very limited resource in New Zealand. Even getting that resource offshore is difficult."
That was not the case for geotechnical experts based in Christchurch who, as work dries up in Canterbury, are increasingly looking to move to Wellington, he said.
Statistics New Zealand data showed economic activity in New Zealand for the year ended September 2013 was up 2.6 per cent. Infometrics estimated the equivalent figure for the Wellington region was 1.3 per cent.
However, the recent ANZ Activity Outlook Index for Wellington reached its highest level since February 1989 with a net 64.3 per cent of local businesses expecting an increase in activity over the next year. The national figure was 53.5 per cent.
A Wellington Employers' Chamber of Commerce survey in November had a similar result.
The Grow Wellington report said if "the numbers in these survey results do eventuate, then the outlook for Wellington's economic growth is incredibly strong".
But it warned that capacity constraints, including labour shortages, would curtail the growth potential, as would anticipated increases in interest rates.
Buildings currently being strengthened: Bats Theatre, Wellington Central Fire Station, the Courtenay Place TAB, the Hope Gibbons Building, and $54m of work on the Majestic Centre.
Possible project: $60m to strengthen the Town Hall.
The council is half-way through a $400m project to upgrade and strengthen its social housing estates.
The list of all earthquake-prone buildings in Wellington runs to more than 600 buildings.
Owners have up to 15 years to bring their buildings up to a minimum of 34 per cent of the building code.
Harbour City Centre building, which is tenanted by Contact Energy, was quake-strengthened last year.
Wellington railway station's grand entrance hall: a $1.9 million project to quake strengthen its elaborate ceiling.