ASB Cantometer Index
LABOUR DEMAND AND WAGES CONTINUE TO LIFT IN CANTERBURY
• The ASB Cantometer lifted again in August, rising to 1.
• Increased employment demand and wage growth continue to contribute to a broadening in Canterbury’s economic recovery.
ASB’s Cantometer Index continues its steady climb upward, rising to 1 in August supported by further increase in employment demand in Canterbury and stronger wage growth.
ASB Chief Economist Nick Tuffley says, “Labour demand in Canterbury continues to lift, led by rebuild activity. According to the Quarterly Employment Survey (QES), construction employment is now very close to its previous highs recorded during 2006-2007 at the end of the previous construction boom.” Mr Tuffley notes, “The outlook is promising with consent issuance, an indicator of demand in the pipeline, well above previous peaks and job growth is likely to continue in this sector over the coming year.”
The lift in employment will not be isolated to construction, with many other industries also enjoying strong growth and increased employment opportunities.
Mr Tuffley says, “The lift in population has stimulated additional demand in the hospitality sector – this area was one of the hardest hit economically in the wake of the earthquakes and closure of the CBD.”
The QES measure of wage growth shows a significant lift in Canterbury wages relative to the rest of the country. Mr Tuffley says, “As employment increases in the region and skill shortages emerge, wages in Canterbury will outperform the rest of the country to encourage a shift in labour resource to the region.”
The New Zealand and Canterbury economic recovery is starting to broaden beyond construction. Consumer confidence has steadily improved and retail spending has increased strongly in recent quarters. “While current inflation pressures are subdued, it is widely expected inflation will quickly lift over the coming year as the economic recovery strengthens. We continue to expect the RBNZ will start to lift the OCR from March 2014,” concludes Mr Tuffley.