22 Nov 2011

Quakes can't stop Canterbury economy from booming

2:56 pm on 22 November 2011

Latest figures show the Canterbury economy is the fastest growing in the country.

National Bank Regional Trends data show growth of 1.8% for Canterbury in the three months to the end of September. It was the second successive quarter when the region outperformed the rest of the country.

The main driver was strong commodity prices for dairy products, wool and grain.

Business and consumer confidence was up, which fed into increased house sales.

Port of Lyttelton chief executive Peter Davie says container volumes were up 14% over the quarter.

Mr Davie says the extra business was a real benefit to the port as it attempts to repair extensive earthquake damage.

However, National Bank economist Steve Edwards says much of the region's growth was to be expected, given that Canterbury was coming off a low base and experienced a 3% fall in business activity during the first quarter of the year.

But Mr Edwards says New Zealand can expect growth in the next year of up to 4%, thanks largely to the money due to flow into Canterbury next year as part of the earthquake rebuild.

He also says the European debt crisis could provide a spanner in the works if lines of credit dry up and demand for exports fall.