Rebuild a factor in GDP figures

ALAN WOOD
Last updated 08:04 21/12/2012

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Canterbury's residential and non-residential building construction activity continues to gather pace, helping support New Zealand's economic growth.

New Christchurch construction and repairs to earthquake-damaged buildings and infrastructure worth billions of dollars is already supporting gross domestic product (GDP) data.

GDP figures released yesterday showed New Zealand's economic activity grew a sluggish 0.2 per cent in the three months to September 30.

The manufacturing and agriculture sectors dragged the third-quarter figure back to being much weaker than analysts' median forecast of 0.5 per cent.

Statistics New Zealand said that in the third quarter, national construction was up 4.5 per cent on a quarter by quarter basis, due to increases in residential and non-residential building, with Canterbury featuring in both those sectors.

"The residential bit is the bit that's growing quickly . . . and that's going to be the part of the Canterbury reconstruction that's going to be the most obvious for the next year," UBS New Zealand senior economist Robin Clements said.

"The bigger projects, the anchor projects (such as a new convention centre) are a year away still."

GDP growth in the Canterbury region was accelerating, Clements said, although he noted that regional figures were not released.

Canterbury Employers' Chamber of Commerce chief executive Peter Townsend said that between $30 billion and $40b is due to be spent on earthquake repairs and rebuild projects.

Up to $16b of that could be spent on the repair of homes that had suffered more than $100,000 worth of damage.

The figures also showed manufacturing was down 1.1 per cent, due to decreases in metal product and food and beverage manufacturing. Agriculture fell 2.8 per cent in the quarter after higher than usual growth in the first six months of the year.

Statistics New Zealand national accounts manager Rachael Milicich said construction activity's rise this quarter was the largest since a 7.5 per cent increase in the June 2010 quarter.

Barring further quakes and given the consent process, the latter half of 2013 should see considerable replacement of broken dwellings, Registered Master Builders Federation boss Warwick Quinn said.

Up to 4000 homes had been built in wider Christchurch, including parts of Waimakariri and Selwyn, in calendar 2012.

The Christchurch figure could grow to 5000 in 2013 and at least 20,000 homes could be built in the next four or five years, Quinn said.

Townsend said there was a lot of work on the more costly repairs of 30,000 damaged homes, with construction yet to start. "The rough estimate of the cost of that is [$10 billion] to $16 billion, and that's money locked into this region."

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Although some areas of manufacturing were struggling with the high kiwi dollar, other specialised manufacturers continued to do well, Townsend said.

"Agricultural prices have come off a bit, but we've come off a pretty amazing season across the country, particularly in Canterbury. The productivity of our region is one of the things that has held up economic activity in our city."

- The Press

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