Between Auckland’s housing shortage, the Canterbury earthquake rebuild and repairs to damaged Wellington buildings, Kaikoura and the road and rail infrastructure fixes could face lengthy waits.
In response to the 7.8 earthquake just after midnight on Monday and more than 2000 aftershocks, ANZ chief economist Cameron Bagrie yesterday looked at the economic impact on the quake-affected areas and the country.
Unlike in 2011, the construction sector this year was facing severe labour shortages and capacity constraints, Mr Bagrie said.
"With the economy already operating at or near capacity, this is a vastly different backdrop than during the Christchurch quakes," he said.
While it was only four days after the 7.8 earthquake, Mr Bagrie said speculation was the cost was "in the billions", but he believed the estimates would increase.
"Aftershocks are continuing so it is quite possible that early estimates of damages will be ramped up," he said.
While regions neighbouring Kaikoura would benefit from tourists redirecting their travels, that loss of tourism for Kaikoura and North Canterbury would be "massive".
"We’re heading into summer, with retailing, hospitality and tourism particularly key for the region’s economy," Mr Bagrie said.
In the year to September, international tourists spent an estimated $72 million in the Kaikoura district and domestic tourists spent an additional $48 million — a total of $120 million.
International and domestic tourist spending for the North Canterbury, Marlborough and Nelson-Tasman regions were, respectively, $482 million and $782 million.
"Given roading damage, it’s difficult to see any degree of normality returning to the region within a year. The roading damage appears extremely difficult to fix," Mr Bagrie said of the multitude of slips, rockfalls and ground upheaval.
The "key influence" on the hit to near-term growth seemed to be centred on disruption to transport and freight links, Mr Bagrie said.While the construction sector would have an additional boost from direct rebuild work, it would also benefit from the ongoing push for earthquake strengthening work elsewhere.
"However, with the construction sector already capacity constrained, there will be limits to how quickly activity can be ramped up further, if at all," Mr Bagrie said.
Firms were already saying labour was "extremely difficult to find" and Mr Bagrie noted that once rebuilding got under way, construction costs and wage pressure would only intensify.
"The economy is operating at full capacity now; it wasn’t during the Christchurch quakes. That matters," Mr Bagrie said.
