Christchurch rebuild offsets drought impact
The Canterbury rebuild may be keeping the New Zealand economy's head above water.
The growth in construction and related architectural and engineering work is offsetting the slump in agricultural production, Statistics New Zealand data for the March quarter gross domestic product (GDP) shows.
GDP came in at only 0.3 per cent growth in the March quarter, just under half of what the pundits had been forecasting.
It was pulled down by a sharp fall in milk production because of the drought.
"I don't think it is unreasonable to suggest that were it not for the contribution coming from the Canterbury rebuild, GDP could have shrunk," UBS senior economist Robin Clements said.
The GDP data showed business services jumped 3.9 per cent in the March quarter from the December quarter, much of that down to architectural and engineering services.
Construction jumped 5.5 per cent in the March quarter, predominantly residential building and associated work in Canterbury, Statistics New Zealand said.
In Christchurch architects and structural engineers are "insanely busy" with almost overwhelming amounts of work.
Leading architect David Sheppard said the city's 100 or so architects were "incredibly busy" across the board. But it had not translated yet into a lot of commercial building.
The Christchurch City Council's consenting problems were not necessarily the stumbling block. It was the property owners working out acceptable levels of rents to lure enough tenants to feel confident to start building, while they faced higher material, labour and foundation costs.
Sheppard said he was hearing there was a still lot of building capacity available in the city.
Architects were struggling to find staff with enough experience.
A few architectural firms from Wellington and Auckland had set up offices in the city but were finding it hard to break into the market.
Structural engineer Grant Wilkinson, of Ruamoko Solutions, said structural engineers were "insanely busy".
The amount of work was far outstripping the ability of firms to meet it, so clients were waiting a long time.
His firm had stopped doing residential assessments and DEEs (detailed engineering evaluations) and was focusing on the rebuild. It had become involved in about a dozen medium-sized commercial building projects.
Migrant structural engineers had come to Christchurch but were not trained in seismic engineering. Some companies were training them, others were not. Fortunately the University of Canterbury was soon to offer a series of seminars on seismic engineering.
Wilkinson had expected more engineers from quake-prone California to seek work here but it seemed Christchurch work was not profitable enough for them yet.
While there was far too much work for local firms, Auckland and Wellington structural engineers had their hands full with assessments of buildings in their regions, because tenants now around the country were demanding stronger buildings.
"There is at least 10 years of work of high intensity for engineers and architects," Wilkinson said.
Jennian Homes general manager Rob Sloan said building houses after the quakes required much more paperwork, with easily a couple of engineering assessments.
It could take an insurance rebuild up to eight months to process the various stages of assessments.
"The process is incredible."
It has been reported that Cantabrians believed insurance companies, projects managers and others were "dicking around" but clients were part of the problem. Some of them never wanted to build a house and were taking time to make decisions.
- March quarter GDP rose 0.3 per cent.
- Economic activity for the year ended March 2013 was up 2.5 per cent.
- Business services were up 3.9 per cent in the quarter, driven by architectural and engineering services in Canterbury and Auckland.
- Construction was up 5.5 per cent, due to residential building and associated construction services activity in Canterbury.
- Agriculture fell 4.7 per cent, due to dry weather causing dairy stock to be dried off early and resulting in lower milk production.