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


ASB Cantometer Index

Media Release
ASB Cantometer Index


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.”


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.


© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines



Relevant Consents Gained: Government Unveils RMA Reform Package

The government has formally hauled down the flag on its attempts to alter the balance of environmental and economic priorities in the Resource Management Act, unveiling a 180-page Resource Legislation Amendment Bill containing reforms that have been largely endorsed by most political parties. More>>


Closing Schools And Such: Interim Redcliffs Decision Announced

“While the school’s board has argued that circumstances that could give rise to potential disruption are extremely unlikely, advice from technical experts has shown these concerns cannot be ruled out." More>>


Jane Kelsey: High Court Can’t Make Groser Provide TPPA Information Faster

‘This week we went back to court to challenge Trade Minister Groser’s stalling tactics over the release of information on the Trans-Pacific Partnership Agreement negotiations, following a High Court order that he reconsider the Official Information Act request I made last January’, said University of Auckland law professor Jane Kelsey, first applicant in the case. More>>

Werewolf 58: No Climate For Change

The last time the global community tried to take collective action on climate change the world’s leaders finally came to agree that every not-too-onerous effort should be made to hold global warming to 2°C above the pre-industrial average. At Paris, all 150 participant countries nations will have put forward their pledges... On the information available, New Zealand's is the second weakest contribution of any nation in the developed world. More>>


Lambton Quay Shutdown: Object Was Made To Look Like Bomb

Police cordoned off part of Lambton Quay Wednesday afternoon, saying that a suspicious package had been found. Buildings were evacuated and buses were detoured. The army’s explosive ordnance disposal unit was brought to the Quay. More>>


Public Sector Still Shrinking: Record Low Number Of 'Backroom Bureaucrats'

Ongoing restraint in the public sector and a focus on better frontline services has seen a further reduction in the number of core Government employees, State Services Minister Paula Bennett says. More>>


Disobeying The Law: Police Censorship Of Crime Research “An Outrage”

The Green Party is calling on Police Minister Michael Woodhouse to ensure Police scrap controversial contracts that place onerous restrictions on academic researchers’ access to Police data, the Green Party says. More>>


Get More From Scoop



Search Scoop  
Powered by Vodafone
NZ independent news