The rebuild of Christchurch is officially under way and business leader Peter Townsend "can now smell the money".
A report for The Press shows the South Island economy is growing at its fastest pace for eight years - 3.3 per cent.
A good deal of that is due to the rebuild of Canterbury cranking up.
Canterbury Employers' Chamber of Commerce chief executive Peter Townsend said: "The best way I can describe it is you can now smell the money."
It was starting to flow through the region. "And I think that's going to play out in some quite major growth kicking in at the beginning of next year. People are starting to get to the stage they want to invest, they are wanting to make plans."
The insurance market was returning to some functionality and a lot of road and some building construction was taking place in Christchurch.
There were still delays in the housing market but even there activity was stepping up. One of the major insurers had 546 new houses in various stages of planning.
"You can see it is just starting to crank up," Townsend said.
Christchurch economist Robin Clements crunches South Island economic data for The Press' quarterly report, The Mainland Monitor, which has been tracking business activity in the South Island from 1990. It shows growth of 3.3 per cent for the South Island at the September quarter, the fastest growth since late 2004, and above the average for the past 22 years.
The National Bank tracks regional economies and it says average annual growth in Canterbury at the June quarter this year was 4.4 per cent, the fastest in five years, measured by its survey.
Clements' report says investment intentions with regard to buildings are at their strongest level since 2004.
New home consents surged in August, particularly in Canterbury. Canterbury had a higher number and value of building consents in August than Auckland for the first time since 1990.
Rising non-residential building consents were concentrating in Canterbury too.
Townsend says there is hardly a spare section for new buildings in Moorhouse Ave, and Lincoln Rd in Addington was similar.
He was starting to see a shift in mindset from "oh dear me broken city to wow what an opportunity".
Residents were beginning to understand this was "the biggest piece of economic development ever in the history or our country".
"You know it is going to take a long time but that is locking in positive growth for a long time."
Christchurch's growth would be quite distinct from the rest of New Zealand, but because the region would need outside labour and investment for the reconstruction it would have significant flow-on effects.
"The rebuild of Canterbury is going to contribute probably to more than half of the growth of the New Zealand economy over the next three to five years," Townsend says.
Clements cautions that economic growth doesn't go in straight lines, so there could be ups and downs in Canterbury's growth.
"At some point in time over the next year or two it's more likely that's going to be up than down and it could be up quite a lot, a new peak."
- © Fairfax NZ News
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