Canterbury showing further recovery - ASB
(24 January 2013 – New Zealand) According to the latest ASB Cantometer index, which measures economic activity in the Canterbury region, trade lifted significantly last month, increasing to 0.5 from 0.2, suggesting activity is now firmly above pre-quake levels.
Much of the improvement stems from the consumer spending index, which has lifted to +0.3 from -0.8 based on data released over the past month.
ASB chief economist Nick Tuffley said: "The Christchurch Retail Trade Indicator revealed further recovery in retail spending over Q3, with the quarterly pace of Christchurch retail spending growth outpacing that of the rest of the country."
Tuffley said there are other positive indicators also, "In addition, there was a sharp improvement in Canterbury consumer confidence over Q4. The continued recovery in these areas suggests economic activity is starting to broaden beyond construction."
"We expect Canterbury reconstruction activity to continue to underpin the nationwide lift in residential construction over the coming year," Tuffley said.
"However, the Q3 GDP figures released just before Christmas suggest there is less momentum in support industries (such as professional services) than previously thought."
"In light of indications of less momentum in the wider economy and subdued inflation pressures we now expect the Reserve Bank of New Zealand (RBNZ) will leave the official cash rate (OCR) unchanged until March 2014," concluded Tuffley.
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.
ASB chief economist Nick Tuffley said: "The Christchurch Retail Trade Indicator revealed further recovery in retail spending over Q3, with the quarterly pace of Christchurch retail spending growth outpacing that of the rest of the country."
Tuffley said there are other positive indicators also, "In addition, there was a sharp improvement in Canterbury consumer confidence over Q4. The continued recovery in these areas suggests economic activity is starting to broaden beyond construction."
"We expect Canterbury reconstruction activity to continue to underpin the nationwide lift in residential construction over the coming year," Tuffley said.
"However, the Q3 GDP figures released just before Christmas suggest there is less momentum in support industries (such as professional services) than previously thought."
"In light of indications of less momentum in the wider economy and subdued inflation pressures we now expect the Reserve Bank of New Zealand (RBNZ) will leave the official cash rate (OCR) unchanged until March 2014," concluded Tuffley.
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.
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