Construction underpinning Canterbury pick-up

Construction is driving an increase in the 'Cantometer'. Photo / Christchurch Star

Economic activity in Canterbury is continuing to improve but sectors beyond construction are still more subdued than pre-earthquake levels, according to ASB's latest 'Cantometer'.

The second-released Cantometer, a composite index of Canterbury activity, showed an overall lift in the region's economy last month was underpinned by further improvement in construction.

Aggregate activity at 0.2, up from 0.1 last month, indicated that activity remained above pre-earthquake levels. The index has been set to zero in June 2010, immediately before the first major quake struck on September 4.

Canterbury construction activity increased 34 per cent over the third quarter, which suggested the rebuild was now making "meaningful progress", said ASB chief economist Nick Tuffley.

"In addition, building consents remain firm, indicating further activity is in the pipeline," he said.

Another encouraging sign of progress was the recent lift in housing market turnover, Tuffley said.

"As uncertainties have reduced, real estate agents have noted a renewed interest in earthquake-affected areas."

ASB's Cantometer covers sub-categories construction, housing, employment, consumer spending and miscellaneous (which includes electricity, car registrations, guest nights and permanent and long-term net migration).

Aside from construction, the indicators remained steady but were still currently below pre-earthquake levels, Tuffley said.

"Over time, we are looking for lifts in these areas as a sign of increased confidence and employment in the region.

"We expect Canterbury reconstruction activity to underpin the nationwide lift in residential construction over the coming year."