It’s exciting times in Christchurch, according to Peter Townsend, the Chief Executive of Canterbury Employers’ Chamber of Commerce. With more buildings now going up than coming down, every economic indicator in the city is positive.
The rebuild of Christchurch is no longer at the forefront of most New Zealanders’ minds and neither should it be. The rebuild is very much in the hands of the population of Christchurch with continuing good support from Central Government and engagement of many companies from outside our region. Fundamentally it is now a Christchurch centric issue.
That perception should not, however, disguise the quantum of the rebuild. The reality is that in our city we are spending $100 million a week, every week, on the rebuild and will probably end up with a total repair bill of around $40 billion to cover the cost of what has occurred as a result of the earthquake, and another $5 billion to cover cost escalation and betterment.
Every economic indicator in our city is positive. We have unemployment at almost half the New Zealand average, regional growth in double figures, positive business sentiment, and very good signs of recovery continuing to gain momentum and manifest itself physically in new assets in our city.
We are, however, still only around 25% into the rebuild based on monetary value. We have a long way to go, we are continuing to build scale, and we are continuing to collaborate with companies outside of Christchurch to assist us to do that.
There are now more cranes putting buildings up then taking them down in our central city and we are starting to see the beginnings of exciting new developments right across what used to be a very desolate landscape.
It is worth recalling that 80% of the buildings in our core CBD were destroyed, around a total of 1,100 commercial buildings with 500 further commercial buildings taken out in wider Christchurch. We have $20 billion of housing damage to repair and the horizontal infrastructure bill is expected to exceed $3 billion. All of that is about pouring a lot of money into Christchurch in the context of the rebuild.
Most of that money comes from insurance proceeds. It is estimated that of the total $40 billion of damage (as opposed to the cost of recovery), $32 billion has been funded by insurance, with $12 billion coming out of EQC, $20 billion from the private insurance sector, and Central and Local Government making up the balance.
It is also worth reflecting on the interdependency between the rebuild of Christchurch and the accelerated economic development of our region. The region of Canterbury currently has 70% of New Zealand’s irrigated land and there are projects now underway to increase that area markedly that will provide the ability to produce more primary produce; to move it further up the value chain by applying technology and to underpin the economic prosperity of Canterbury and the South Island.
There is much discussion about what happens when we come off the peak of the rebuild in Christchurch. When we are well advanced in the recovery it will be important to have a strong regional and South Island economy to continue to support Christchurch, the capital of the South Island.
It will also be important that our city itself has changed its economic base into one that supports applied technology to the entire South Island, an already strong manufacturing sector and burgeoning IT and R&D economic contribution.
Chief Executive, Canterbury Employers’ Chamber of Commerce