Chch rebuild helping drive national growth
The Christchurch rebuild is clearly playing a large part in driving the country's economic growth, the latest economic data shows.
Yesterday, GDP data for the March quarter revealed that two-thirds of the country's growth in the first three months of the year came from the construction industry.
That was the largest increase in construction in 14 years, Statistics New Zealand said.
The March-quarter boom in building work was the second highest on record, just behind that in the March quarter in 2000, statistics said.
Christchurch's residential building boom and the gathering momentum in commercial construction was a big contributor to national growth, economists said.
The country clocked up a healthy 1 per cent GDP growth in the March quarter over the December quarter's figures, a tad less than economists expected.
Annual growth hit 3.3 per cent, the biggest March-year gain since 2006, before the global financial crisis hit.
A leading Christchurch builder, Anthony Leighs of Leighs Construction, said commercial building was starting to gather momentum in Christchurch.
And the CBD was poised for more activity.
"I sort of loosely say that between the Avon River and Manchester Street and Hereford Street and Tuam Street it's pretty much solidly going to be under construction within three or four months, quite staggering really," he said.
A lot of significant commercial development was planned and would be announced "in due course".
"I just keep saying to people, ‘Come back to the core CBD of Christchurch in a few months time and it will be a completely different picture to what you see today'."
Christchurch's largest residential builder, Mike Greer, said the company was not quite as busy as he had expected because the restrictions on lending imposed by the Reserve Bank and rising interest rates had scared off some buyers of "affordable" house-and-land packages under $450,000.
Those sales were down about 20 per cent on what had been expected.
The other factor slowing the company down was inspections by local authorities, Greer said. A new home might be inspected 15 times before completion, and not enough inspectors were available.
UBS senior economist Robin Clements and Westpac economist Michael Gordon said the rebuild had been an important driver of economic growth over the past year.
"There is no doubt that the building industry's upturn is well advanced, led by the Christchurch rebuild but increasingly spreading to other regions, " Gordon said.
In value, residential building in Canterbury was 31 per cent higher in the first three months of this year, than during the same period last year. Nationally, residential building in the rest of the country was 12 per cent ahead.
On the non-residential building front, Canterbury's figures were 15.8 per cent ahead of last year's and the rest of the country was 19 per cent ahead.
The other growth sector in the March quarter was mining, up 6.3 per cent because of higher oil and gas production.
It was a rebound from a near 10 per cent slump in mining in the September quarter, when the big offshore Maari oil field was closed for about four months.
Offsetting these gains was a 1.5 per cent drop in the wholesale trade sector, with a dip in machinery and equipment wholesaling.
Spending by NZ households was flat, with higher spending on durables like televisions, but less on services.