Canterbury Recovery Broadening Beyond Construction

Tuesday, 23 April 2013, 3:19 pm
Press Release: ASB Bank

Media release
ASB Cantometer Index

EMBARGOED UNTIL 5am Tuesday 23 April 2013

ASB Cantometer Shows Canterbury Recovery Broadening Beyond Construction

• ASB Cantometer lifted over April, led by continued recovery in consumer spending and confidence.
• Construction led-growth in Canterbury is spilling over into broader demand throughout the region.

The ASB Cantometer snapshot index improved over April, lifting to 0.6 from 0.5. Driving much of the improvement was a lift in the consumer spending index, to 0.7 from 0.3. Underpinning that lift in the consumer spending index was further recovery in Q4 Canterbury retail spending and Q1 Canterbury consumer confidence data, both of which were released over the past month.

ASB Senior Economist Jane Turner says, “The outlook remains encouraging. The lift in consumer confidence along with continued population growth should support retail spending growth going forward.”

Also contributing to the lift in the Cantometer was an improvement in car registrations in Canterbury, and a lift in permanent and long-term net migration inflows. Ms Turner notes, “These indicate continued growth in population and activity in Canterbury, as the rebuild attracts resources from around the country and offshore.”

“The lifts in consumer spending and other areas indicate a broadening in Canterbury economic activity. Strong construction activity is now spilling over into demand elsewhere in the Canterbury region,” says Ms Turner.

The construction index eased over April, but remains at a high level. Ms Turner says, “We continue to expect further growth in construction activity in Canterbury over the coming year. However, there are indications that resource constraints are starting to bite in Canterbury. This may limit the growth in construction activity going forward as supply may struggle to keep up with demand.”

Outlook

“The RBNZ will balance the Canterbury construction-led lift in activity and intensifying housing market pressures against the impact of the elevated NZD. We continue to expect the RBNZ will leave the OCR unchanged until March 2014,” concludes Ms Turner.

ENDS

About the Cantometer

The Cantometer is designed to summarise activity in Canterbury. The study takes a range of publically available regional economic data, which is standardised and aggregated into a summary measure. The index has been rebased to zero in June 2010 (the end of the quarter immediately preceding the first earthquake) such that a positive number represents activity being above pre-earthquake levels.

Along with the aggregate Cantometer index, there are five sub categories: Construction, Housing, Employment, Consumer spending and Miscellaneous*.
These sub-indices will provide some insight into which sectors are driving the rebuild activity at a given point in time.

For most activity the data reference the level of activity. However, when incorporating wages and house prices into the index we believe levels are less informative. Instead the index uses prices relative to the rest of the country.
An increase in relative prices is a signal for resources to be reallocated to the Canterbury region.

The historical Cantometer series represented on the charts is a simple average of the complete set of data for each month.

*The miscellaneous category includes electricity, car registrations, guest nights and permanent and long-term net migration. A common factor driving these areas will be population growth, and we expect all these indicators to increase as the rebuild gathers momentum.

© Scoop Media

ASB Bank

Helping you get one step ahead.

In 1847, ASB opened as the Auckland Savings Bank with the pledge: 'to serve the community; to grow and to help Kiwis grow'. And that is very much what ASB is about today.

ASB is a leading provider of integrated financial services in New Zealand including retail, business and rural banking, funds management and insurance.

ASB strives to consistently provide its customers with outstanding service and innovative financial solutions. They're dedicated to providing simple financial products that allow their customers to bank with them how and when they want.

We all have our own ways to measure progress, and our own stories about the things that matter to us. Whatever way you choose to measure progress, and whatever your goals, ASB is there to help you get one step ahead.

Contact ASB Bank

• Info on - Bank Accounts
• Info on - ASB Home Loans
• Info on - ASB Credit Cards
• Link to - Mortgage Calculator
• Info on - Business Banking
• Info on - ASB Kiwisaver
• Link to - ASB Blog
• Info on - Personal Loans