Capital shakes off the quake

Businesses appear to be shrugging off the impact of the November 14 earthquake, with confidence in the capital at a two-year high.

The New Zealand Institute of Economic Research’s quarterly survey of business opinion (QSBO) for December found a net 26 per cent of businesses expect business conditions to improve over the coming year.

Confidence remained robust in most regions, with increases in both the South Island and Wellington, despite disruption to the capital city from the November earthquake.

A net 33 per cent of businesses surveyed in the Wellington region expect business conditions to improve in the coming months, the strongest reading since September 2014.

‘‘It does appear that the effect of the earthquake has been fairly modest across the [Wellington] region,’’ NZIER senior economist Christina Leung said.

Wellington mayor Justin Lester said the QSBO results were ‘‘encouraging’’ and it was clear the capital had been performing strongly for some time.

‘‘It’s been a real disruption for many people, and it’s great to see our businesses have been resilient,’’ Lester said.

Other surveys have pointed to a much weaker outlook for the capital. On Monday a Wellington Chamber of Commerce survey showed a sharp drop in the number of businesses expecting conditions to improve in Wellington.

"It does appear that the effect of the earthquake has been fairly modest across the region." Christina Leung, NZIER senior economist

Meanwhile, the Westpac McDermott Miller regional economic confidence survey for December, released yesterday, saw Wellington plunge from the most confident part of the country in the September quarter, to close to the least optimistic region by the end of December.

‘‘While not at the epicentre of New Zealand’s latest big earthquake, Wellingtonians were certainly jolted back to reality by recent events,’’ Westpac senior economist Anne Boniface said, with the disruption trumping rising house prices and a growing population.

‘‘This reminder of the region’s vulnerabilities has made respondents much more circumspect about the economic outlook for their region over the year ahead.’’

Across New Zealand, the number of businesses that expect their own activity to improve – generally seen as a better guide to future economic growth – eased slightly in the latest QSBO survey.

A net 25 per cent of businesses expect to see increased activity in the coming quarter, down from a net 32 per cent in September.