Canterbury rebuild 'plateau' knocks business confidence to four-year low
Business confidence in Canterbury has plummeted to its lowest level in four years, but it is no surprise to the Employers' Chamber of Commerce (CECC).
The employment and construction sectors are reporting less demand for their services as the central-city rebuild momentum slows.
A Westpac McDermott Miller Regional Economic Confidence survey for December found 14 per cent of Cantabrians expected the region's economic fortunes to improve over the coming year.
Westpac acting chief economist Michael Gordon said Canterbury's economy was changing after years of strong growth driven by the rebuild.
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Reconstruction was now "well advanced" and had begun to wind down, he said.
CECC chief executive Peter Townsend said the survey result was unsurprising as growth in Christchurch was "plateauing out".
"My pick is that we're probably close to 60 to 65 per cent through the total rebuild, and I'm talking about the construction side of the rebuild, so that's about $30 billion," he said.
"So we don't have businesses expecting continuing increases in growth.
"There are probably another couple of years of big-spends to go, but it's not going to continue to grow in expenditure; it's going to be a plateaued expenditure, which will gradually tail off."
Tradestaff managing director Kevin Eder said his company provided staff for everything from anchor projects to small manufacturing plants.
"In regards to new workers working in Christchurch, particularly in the construction phase, we don't expect those numbers to increase," he said.
"In actual fact we think over a period of time they'll decline, simply because there are three companies large enough to do an anchor project, they've each got one and they're basically not growing any other business until they go on to the next one.
"Housing and the other smaller developments, as they start to slow down … we would expect staff numbers, or certainly the influx of new workers, to decline."
Demand for workers in Auckland was now "much more significant" than in Christchurch.
"This is a recent phenomena … where we've really seen Auckland sort of wake up.
"It's all of the things that Christchurch isn't – there are places to go, the business spend is up dramatically, there are new hotels," he said.
The construction sector appears to be feeling the effects of a slowing rebuild as about 160 industry companies registered in Canterbury were liquidated between January 2015 and August 2016.
Many arrived in Christchurch because of the post-earthquake building boom.
Canterbury Registered Master Builders president Ivan Stanicich said members had been reporting a "dramatic drop-off" in new-build inquiries since October.
He estimated 80 per cent of industry liquidations in 2016 were because the rebuild was no longer growing.
"I read them (the liquidated company names) every morning out of interest and I don't really see any familiar names.
"There are just guys that have started some sort of building division, you know, some painters have got building divisions."