Canterbury Economy and Labour Market
Canterbury Economy outlook
CERA publishes an overview of the region’s economic performance along with monthly indicators. These are available from cera.govt.nz/economic-indicators.
As at end-October 2012, estimates of economic activity continue to suggest strong regional growth. Consumer spending is continuing to rebound and the services industry is growing, although the pace of growth appears to be slowing. Additionally, further employers have returned to the Christchurch central city.
There has also been a significant increase in building consents issued in greater Christchurch. A new indicator – the CERA Building Consents Index – illustrates that there has been very high growth in residential and non-residential building consents. In fact, more residential building consents for new dwellings, by number and value, were issued in Canterbury than Auckland during August 2012. This is only the second time that this has happened since publicly available records for these regions began in 1991. The first time that this occurred was in January this year.
At the same time, however, international trade has recently decreased slightly. In particular, the value of exports and imports going through Lyttelton Port have decreased in the last month. The Lyttelton Port Company has also announced a forecast 17% reduction in its 30 June 2013 coal volumes.
Nonetheless, the net outlook remains positive, with agricultural indicators remaining robust. The amount of jobs advertised in Canterbury remains very high and well above national trends.
The number of people leaving the Canterbury region has eased and is now at a similar level to before the September 2010 earthquake.
Statistics New Zealand’s annual regional population estimates show, for Canterbury, that, in the last 12 months (in the year to June):
- The population loss in Canterbury and Christchurch is slowing.
- Christchurch’s population fell by 4,600 (1.2 percent) in the year ended 30 June 2012, while Selwyn district has experienced the largest population growth for any territorial authority, expanding by 2.9% in the year.
- Canterbury region’s population decreased by 1,800 people (0.3 percent).
- In the past 2 years, Canterbury’s population under 20 has fallen by 5.7 percent while the population aged 35-49 has fallen by 5.5 percent. This suggests an outflow of children and their parents from the region over the period. For more information click here.
Interestingly, the older population seems to be staying put, with the population aged 65+ increasing by 5.3% over the past 2 years.
Canterbury labour market
New Zealand’s domestic recovery is expected to accelerate as the Canterbury rebuild ramps up. This will lead to a steady improvement in the labour market, with moderate employment growth in the short-term.
Demand for labour is growing
The Canterbury region will need a broad pool of workers to sustain the construction work. Advertised vacancies in the Canterbury region have increased dramatically over the past 18 months (see Figure 1), compared to other regions. Some of this increase will be due to new jobs being created and some due to turnover as a result of people leaving the region.
Growth in job vacancies in Canterbury was driven by the construction and engineering industry (up by 108.4%) as the Canterbury rebuild continues to boost demand for workers.
Occupations in demand
The Canterbury rebuild will require many thousands of additional construction workers at its peak. The most in demand construction-related occupations are carpenters and joiners, paint trade workers, plasters and concreters.
The rebuild is likely to occur over many years. Such factors as continued aftershocks have reduced the prospects of a quicker rebuild. The largest component of the construction effort relates to rebuilding and repairing the many thousands of residential properties. The extensively damaged CBD may also take many years to rebuild. In contrast, land remediation and infrastructure repair are well underway. Both will require fewer, more specialised workers.
While construction workers dominate the required labour pool, a wider pool of talent is required.
This supporting cast includes support staff and services workers. The economic stimulus that will follow the arrival of new workers will in turn drive employment growth in other sectors like hospitality.
There are early signs of that upturn in the growth in vacancies across industries in Canterbury, as shown in Figure 2.