Ball starts rolling towards reconstruction
Canterbury's economic activity jumped 8.6 per cent in the March quarter over the same period a year ago, indicating the region is gearing up for its rebuild.
Christchurch economist Robin Clements says this is a sign momemtum is beginning to build towards the reconstruction of the region.
However that rise in activity was coming of a low base of the March 2011 quarter when Canterbury's business community was battered by the destruction of the February 22 earthquake.
Clements uses the National Bank's Composite Indices of Regional Economic Acitivity and extracts other data for the South Island from economic surveys to provide a quarterly economic snapshot of the South Island for the The Press newspaper's quarterly publication, The Mainland Monitor.
While Canterbury's activity rose 8.6 per cent comparing the March quarter 2012 with March quarter 2011, the South island rose 5.5 per cent, largely because of Canterbury. Economic activity in the other South Island regions was patchy.
He says calculating ''trend'' growth smooths out fluctuations in quarterly data and paints a more reliable picture.
Trend growth for the South Island is 3.1 per cent now and above average, he says.
In 12 to 18 months time he is predicting trend growth of 7.5 per cent, and expects the elusive rebuild to be well and truly underway.
There were conflicting signals too. In the quarter the confidence of firms in the South island slumped and their expectations of profit fell sharply. However, employers' intentions to hire soared to near historic highs, again driven by Canterbury.
While building investment intentions were the lowest since late 2010, they were still well above average and on an improving trend.
Employees are not however chipper about employment prospects despite employers saying they intend to hire more and consumer caution is noted in little increase in retail spending.
Jobs were increasing again after the falls of last year and firms were finding it hard to find skilled workers. But employees' perceptions of job opportunities are the weakest since mid-2009, while job security is the lowest since early 2009.
- Fairfax Media
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