Earthquake reconstruction to drive New Zealand economy: expert

WELLINGTON, Aug. 16 (Xinhua) -- The rebuilding of New Zealand's earthquake-battered Canterbury region will drive national economic growth for at least the next three years, a leading engineer and disaster expert said Thursday.

However, Canterbury businesses would continue to face uncertainty regarding insurance, future seismicity, demographics changes and when and where to rebuild, University of Canterbury College of Engineering researcher Erica Seville said.

Her overview of the Canterbury earthquakes and their economic and business outcomes was part of the first of a series of reports on the earthquakes and their impacts for the Asia-Pacific Economic Cooperation (APEC) forum.

The impact of the earthquakes on the Christchurch businesses was significant, Seville said in a statement.

"Estimates based on property damage place the combined cost of the Canterbury earthquakes at around 20 billion NZ dollars (16.14 billion U.S. dollars). This amount is the equivalent to approximately 10 percent of New Zealand's GDP," she said.

"As a comparison, the estimated cost of the 2011 Japan earthquake and tsunami is around 3 to 4 percent of Japan's annual GDP. While private insurers will bear a significant portion of the costs, the earthquakes have caused a notable deterioration of the government's operating deficit over the 2010-2011 year.

"However, the rebuild is getting underway in 2012 and will drive national investment and growth in the New Zealand economy through 2015. Prior to the September earthquake, the Christchurch CBD was the business and entertainment hub of the South Island," Seville said.

The area within the four avenues that effectively bordered the central city contained 6,000 businesses and more than 51,000 workers before the quakes, which began in September 2010.

As a result of all the earthquakes, about 1,300 buildings more than 60 percent of the commercial buildings in the Christchurch CBD had been marked for demolition, Seville said.

Due to the extensive damage and demolition in Christchurch, businesses had relocated throughout the Canterbury region and New Zealand. With heightened demand on available buildings, the cost of leases and rentals for commercial accommodation had greatly increased.

Business surveys had found that up to 50 percent of businesses had seen a drop in revenues after the Feb. 22 quake that killed 185 people last year, while about 20 percent of the businesses reported an increase.

"A large portion of Canterbury's guest accommodation was located within the Christchurch CBD and became either inaccessible or was damaged. International guest nights in January 2012 were down 40 percent when compared with January 2011. Domestic guest nights decreased 15 percent for the same period," she said.

Seville would be one of the chairs at the major Australasian natural hazards conference to be attended by 250 specialists at the University of Canterbury next week, said the statement.

Figures from Statistics New Zealand, the government statistics agency, last month showed the rebuild was already starting to take effect on the economy, with a surge in approvals for new homes in Canterbury bucking the national trend.

In June last year four months after the Feb. 22 quake Canterbury region saw a record low of just 133 building consents, but the number had shot up to 296 in June this year, with the majority of consents in the districts surrounding the badly damaged city of Christchurch. Enditem