ASB Cantometer Index Lifts as Labour Market Recovers Further
•Further lift in Canterbury employment demand drives another increase in ASB Cantometer.
•Outside of construction, Canterbury recovery remains gradual.
The ASB Cantometer index lifted further over February, rising to 0.6 from 0.5. The lift follows labour market data,
released in early February, which revealed an improvement in employment in the Canterbury region. In particular, hours
worked recovered strongly over the December quarter, with this measure lifting from -1.4 to +0.1 within the Cantometer
Index.
ASB Chief Economist Nick Tuffley says, “Labour market data has been very volatile over the past year. But generally,
we’re seeing a pickup in construction employment and a gradual recovery in employment demand for the Canterbury region
as a whole.”
The remaining sub-indices remained relatively steady over February. The construction index remains strong and continues
to underpin the recovery in the Canterbury region. Nick Tuffley notes that, “We’re still yet to see meaningful
improvement in the Miscellaneous category. So while we’ve seen spillover effects of construction to retailing, other
areas have yet to benefit meaningfully.”
Outlook
“We expect Canterbury reconstruction activity to underpin the nationwide lift in residential construction over the
coming year. However, for the time being, spillover effects from construction remain relatively confined to retailing,”
says Mr Tuffley.
“In light of indications of less momentum in the wider economy and subdued inflation pressures we continue to expect the
RBNZ will leave the OCR unchanged until March 2014,” concludes Mr Tuffley.
About the Cantometer
The Cantometer is designed to summarise activity in Canterbury. The study takes a range of publically available regional
economic data, which is standardised and aggregated into a summary measure. The index has been rebased to zero in June
2010 (the end of the quarter immediately preceding the first earthquake) such that a positive number represents activity
being above pre-earthquake levels.
Along with the aggregate Cantometer index, there are five sub categories: Construction, Housing, Employment, Consumer
spending and Miscellaneous*. These sub-indices will provide some insight into which sectors are driving the rebuild
activity at a given point in time.
For most activity the data reference the level of activity. However, when incorporating wages and house prices into the
index we believe levels are less informative. Instead the index uses prices relative to the rest of the country. An
increase in relative prices is a signal for resources to be reallocated to the Canterbury region.
The historical Cantometer series represented on the charts is a simple average of the complete set of data for each
month.
*The miscellaneous category includes electricity, car registrations, guest nights and permanent and long-term net
migration. A common factor driving these areas will be population growth, and we expect all these indicators to increase
as the rebuild gathers momentum.
ENDS