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Canterbury and Christchurch economies in a transition phase

The city and regional economies continue their steady transition from rebuild driven advancement to underlying (or non-rebuild) growth; maintaining high levels of activity - the key message being presented by Canterbury Development Corporation (CDC) at its Economic Update event today.

CDC Chief Executive Tom Hooper says the city continues to operate at an elevated level of activity due to the rebuild but we can expect to see growth continue its gentle easing as rebuild activity plateaus and the underlying economy once again becomes the primary driver of growth.

“Economic modelling indicates the rebuild is 55 percent complete, so from now on we would expect to see growth ease, but this should not be mistaken for a slowdown in output or the economy.”

Tom Hooper says the level of activity will remain very high, with a competitive labour market, a stabilising housing market, strong performance from key sectors such as manufacturing, agriculture and technology and a return of the city’s population back to pre-quake levels.

“The strength of our key sectors has protected the city from any negative impact of the rebuild plateau. The employment opportunities that have and continue to be generated, along with the affordability and lifestyle options available are attracting more young, skilled migrants to the city who bring an injection of new ideas and skills.”

The areas of focus in today’s economic update are:

Gross Domestic Product (GDP)

Economic activity remains at a very high level, however, as expected, levels are easing as growth is no longer driven by rebuild stimulus.

Christchurch’s GDP growth in the year to June 2016 was 0.8 percent, with activity valued at $18.8 billion. Similarly, Canterbury sits at 0.9 percent, with activity at $27.7 billion.

CDC is forecasting growth to remain at around this level in the near term.

Population

Christchurch’s population has returned to pre-quake levels, sitting at approximately 376,300 in September 2016.

A combination of strong migration and people choosing to remain in the city has meant Christchurch has seen a net gain of just over 1,400 people in the September 2016 quarter.

CDC undertook further research to understand the demographics of migration, including age range and the impact of international migration on Christchurch’s diversity.

Findings show in the year to June 2016:

• Young migrants are choosing Christchurch: 40 percent of migrants were in the 20 to 29-year age group, this is on-par with Auckland who attracts 42 percent in the same age group.

• The rest of Canterbury (primarily Selwyn and Waimakariri), attracts a greater proportion of older migrants: 44 percent of arrivals were aged over 30.

• Diversity is led by the young: currently 29 percent of Christchurch’s population under the age of 35 identify with non-European ethnicity, this is set to increase to 37 percent by 2031.

The Canterbury population recovered to its pre-earthquake level earlier, in 2014. The region dropped below its 2010 population of 567,700 after the earthquakes, bouncing back to 574,300 in 2014, and is now at 600,100.

Labour market

Christchurch continues to experience a steady, competitive labour market with a high participation rate and low unemployment.

The region’s key labour market indicators continue to outperform national statistics:

CDC expects to see Canterbury indicators converge with national levels as rebuild activity eases over the coming year.

Publications released at today’s event are the Christchurch and Canterbury Quarterly Economic Report, produced by the CDC economics team, and The Canterbury Report, which gives economic oversight and features local businesses and their success.

ENDS

Event details:

CDC Summer Economic Update 2016

When: Doors open at 7am, presentation begins at 7.30am, Wednesday 9 November 2016

Pre-booked media interviews will be possible from 9.00am.

Where: The Piano, Philip Carter Family Concert Hall, 156 Armagh St, Christchurch

Graphs will be available at the event. Please contact Adrienne Noon for electronic files.

Publication links:

1. Christchurch and Canterbury Quarterly Economic Update

2. The Canterbury Report, Summer 2016

Sources: CDC, Infometrics Ltd, NZIER and Statistics New Zealand

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