Tuesday 16 August 2016

Outlook for Christchurch economy remains positive

The outlook for Christchurch’s economy remains positive with high levels of activity being maintained as rebuild activity plateaus.

Economic indicators in Canterbury Development Corporation’s (CDC) latest Christchurch and Canterbury Quarterly Economic Report to June 2016 released today show the economy remains in a transition phase as stimulus from rebuild activity continues to ease.

Canterbury has had an exceptional run with economic indicators well above their historic average levels, but several are now starting to move towards national trends.

CDC Chief Executive Tom Hooper says it is important to focus on the high levels of activity still occurring around the city and region, despite GDP growth levels being lower than recent years.

“The outlook for the city remains encouraging. Construction activity will remain high for some time to come, although it will no longer drive growth in the economy.”

Christchurch’s GDP growth in the year to March 2016 was 0.5 percent, with activity valued at $18.8bn. Similarly, Canterbury’s growth eased to 0.8 percent, with activity at $27.6bn.
Non-residential construction remains steady, at 43 percent of all construction activity in the March 2016 quarter, and will be buoyed by upcoming projects such as the Convention Centre.

The report shows that the local housing market has been relatively cool compared to the rest of the country. Rents have continued to ease to more normal levels, with private sector mean rents at $383 in June 2016 – seven percent lower than June last year. House prices have increased modestly, with a median sale price of $440,000 in Christchurch compared to $500,000 nationally – although the latter is inflated due to heat in the Auckland housing market.

"Lower housing prices combined with modest salary increases, on average, is driving an improvement in housing affordability which is great news for Christchurch," Hooper said.
More detailed forecasts for the economy to the end of 2016 are included in the report.

ENDS

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