Pay rises expected in Canterbury

Cantabrians can expect to see more money in their pay packets this year as confidence in the region's economy surges, says one expert.

The latest Westpac McDermott Miller Regional Economic Confidence survey shows the number of households expecting positive economic times for Canterbury rose from 36 per cent in September to 41 per cent in December.

Canterbury Employers' Chamber of Commerce chief executive Peter Townsend said: "Confidence is building along with the rebuild of Christchurch and the enormous economic impact we're seeing."

While that impact is being lead by the construction sector, Mr Townsend said it will flow through the rest of the region's economy.

"Fletchers have paid out over $900 million in wages to contractors ... that's close to $1 billion cash going into our community and that goes around. That goes to houses, that goes to supermarkets, to shops," he said.

Mr Townsend said Cantabrians could expect to see wage increases and more economic stability. "They'll have more certainty when planning for their economic futures," he said.

"For those in business they will see a higher demand for services."

Mr Townsend said members of Christchurch's "casual workforce" should also benefit from improving economic times.

He said employees who had dropped out of the rebuild-centered workforce due to post-earthquake delays in work would soon see more job opportunities.

"It's good news all round for households, but the bad news is we will see pressures on labour resources and human resources and that will risk cost increases," said Mr Townsend.

At the end of the day, the consumer will bear the brunt of such increases, he said.

"Not only will there be wage increases but there will be increases in the prices of materials as we go through resource constraints, so that will lead to price increases. We have to make sure we grow the economy and avoid this."

New Zealand Council of Trade Unions secretary Peter Conway agreed there will be a "spillover effect" from construction to other areas of Canterbury's economy.

"If there's a lot of demand for labour you should expect to see wages rise," he said.

However, Mr Conway said much of the talk among Canterbury employers about wages had so far focused on changes "in the future".

Westpac senior economist Felix Delbrck said: "The earthquake repair and rebuild effort is now clearly underway, and while parts of the region are still struggling, on most indicators the Canterbury economy has been steadily marching upwards in the last six months."

Mr Townsend agreed, saying "the march will continue".

"The simple answer is we've suffered an incredible enormous loss but our community is going to be receiving an enormous gain."

Mr Townsend predicted a "patchy" year for the retail sector but said this area held up well over Christmas.

He said Canterbury's economic confidence will continue to increase, almost regardless of what happens in the rest of New Zealand.

"That's because we've got our funding for the rebuild basically locked down," he said.

Economic confidence in Canterbury is the highest it has been since December 2009.

The national average of households expecting prosperity for their region is a comparatively lowly 13 per cent.

The survey was conducted from December 1 - 10, 2012.

- By Alex Mason of The Star

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