Local Govt | National News Video | Parliament Headlines | Politics Headlines | Search

 


ASB Cantometer Index





Media Release
ASB Cantometer Index


EMARGOED UNTIL 0100 23 NOVEMBER 2012

ASB Cantometer index reveals encouraging but uneven progress in Canterbury recovery
Decline in housing, employment and consumer spending offset by strong construction activity
Reconstruction activity expected to underpin 18 percent nationwide lift in residential construction over the coming year

A new composite index designed by ASB to track the Canterbury recovery has revealed that aggregate activity in the region is now above pre-earthquake levels and that construction activity in the region will have a significant impact on a national scale in the coming year.

The ‘ASB Cantometer’ is designed as a simple indicator of activity to give some insights into the recovery progress across different categories of economic activity. The study uses a range of publicly available economic data, which is aggregated into a summary measure. The index has been set to zero in June 2010, such that a positive number represents activity being above pre-earthquake levels.

The first edition of the Cantometer reveals that following the 2010 and 2011 earthquakes, activity in Canterbury fell sharply on a broad-based basis, however, a large proportion of this post-earthquake disruption reversed relatively quickly.

ASB Chief Economist Nick Tuffley: “Over the past year, we have seen recovery in most areas of the Canterbury economy. The November Cantometer Snapshot, at 0.2, implies aggregate activity has returned to pre-earthquake levels. Construction is the big driver of the lift in the Cantometer, with the construction index sitting at 2.2. Strong lifts in building consents and demand for ready-mix-concrete have led this increase.”

According to Mr Tuffley, the remaining indices remain below pre-earthquake levels. “However, over recent months we have seen steady improvement in most indices. In particular, the continued recovery in permanent and long-term migration is an encouraging sign of increased population and demand in the region. Canterbury wage growth has also been stronger than the rest of the country – as to be expected. These price developments signal demand is lifting, even if it is yet to be apparent in some activity indicators.”

Outlook

The Cantometer indicates construction activity continues to lift, although the flow on to the remainder of the Canterbury economy remains muted during the early days of the rebuild. “We expect Canterbury reconstruction activity to underpin the nationwide lift in residential construction over the coming year, with nationwide activity rising 18 percent over the year to June 2013,” says Mr Tuffley. “However, we continue to expect the RBNZ to remain focused on global uncertainties and the elevated New Zealand dollar, and leave the OCR unchanged at 2.5 percent until September 2013.”

Chart 1: ASB Cantometer


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.

ENDS

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

 

PARLIAMENT TODAY:

Regulators: Govt To ‘Crowd-Source’ Regulatory Advice

A wide-ranging set of reforms is to be implemented to shake up the way New Zealand government agencies develop, write and implement regulations. More>>

ALSO:

Board Appointments: Some Minister Appoint Less The 3 In 10 Women

“It’s 2015 not 1915: Ministers who appoint less than 3 in 10 women to their boards must do better, they have no excuse but to do better,” said Dr Blue. More>>

Gordon Campbell: On The 1990s Retro Proposals For Our Health System

As we learned yesterday, the reviews propose that the democratically elected representation on DHBs should be reduced, such that community wishes will be able to be over-ridden by political appointees. In today’s revelations, the reviews also propose a return to the destructive competitive health model of the 1990s. More>>

ALSO:

Post-Cab Press Conference: Foreign Buyers Register, TPP And Serco

At a press conference today in Wellington, John Key discussed the foreign buyers register as well as the TPP and Serco. Key was questioned on whether a stamp tax might be used as a tool to deal with foreign buyers. More>>

ALSO:

Lyndon Hood Satire: Serco To Outsource Prison To Public Sector

In response to high-profile failings, multinational omnicorporation Serco will introduce public management in its prison system. Serco's New Zealand manager, speaking on condition of anonymity, has announced plans for managers from the Department of Corrections to run the Mt Eden Correctional Facility. More>>

National Party Conference: Plans To Nudge Immigrants Towards Regions

The Government will introduce a package of immigration measures aimed at improving the spread of workers, skills and investment across New Zealand, Immigration Minister Michael Woodhouse says. More>>

ALSO:

Corrections: Serco Relieved Of Control At Mt Eden Prison, Retains Contract

Multi-national private prison operator Serco has been forced to hand back control of Auckland's Mt Eden remand prison to the Department of Corrections, which has used a 'step-in' clause in its contract with Serco following a string of increasingly serious allegations about contraband, prisoner injuries and a death. More>>

ALSO:

Other Experiments: Failing Charter School Stays Open 'For Kids'

Education Minister Hekia Parata says she has given Te Pumanawa o te Wairua in Northland a chance to continue operating because of her concerns about finding other educational opportunities for its students. More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
More RSS  RSS News AlertsNews Alerts
 
 
 
Regional
Search Scoop  
 
 
Powered by Vodafone
NZ independent news