Growing momentum in the Christchurch rebuild could translate to improved earnings for Fletcher Building, New Zealand's biggest listed company.
Fletcher's construction infrastructure general manager for the South Island, Alan Orange, said the rebuilding process had gained traction as insurers extended coverage to builders.
Twenty-one repair hubs have been established throughout the Canterbury region and more than 20,000 home repairs have been completed. Fletcher Construction, a subsidiary, is targeting 100,000 completed repairs by the end of 2015.
Deutsche Bank analyst Emily Behncke said while the momentum was positive for Fletcher Building, she remained sceptical of higher earnings from New Zealand offsetting the drop in profit from Australian operations.
"We've got earnings for financial year 2013 as flat compared with 2012. Our numbers for Fletcher are 11 per cent below consensus, so I think in general the expectation is for the strengthening in New Zealand to more than offset weakness in Australia, which I think is a little too optimistic at this stage," she said.
Orange said insurers had become more comfortable with covering contractors and building sites given that seismic activity had subsided.
Fletcher Building is project managing the Earthquake Recovery (EQR) process and is one of five contractors rebuilding infrastructure. It will also supply building materials.
A development blueprint for the new $30 billion Christchurch central city area has also been finalised. That is the equivalent of 15 per cent of New Zealand's gross domestic product and is the biggest construction effort worldwide. AFR
- © Fairfax NZ News
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