Quake rebuild lifts South Island confidence

South Island firms are increasingly bullish as the mainland takes strength from the earthquake rebuild.

A Grant Thornton IBR survey of 150 companies throughout New Zealand shows an improved business outlook in the South Island where firms are a bit more optimistic than in the North island and are hiring staff at a higher rate.

One Christchurch-based building company that has increased investment and enjoyed a rise in activity as the rebuild begins is Spanbild, which has brands including Versatile Homes and Buildings and Totalspan.

Spanbild chief executive Peter Jensen said his group had invested more than $1 million in preparation for the rebuild.

Some of the investment had been ahead of the real start to recovery work which had taken a lot longer than initial expectations.

However, in the last half of 2012, commercial and residential building work had increased significantly in Canterbury. Spanbild was in a position to judge that as it worked on a national level and also in Australia, Jensen said.

‘‘We had a strong second half of 2012 relative to a very difficult period in the construction industry since 2008 and, yes, the earthquake rebuild activity is certainly a big part of that.

‘‘I would say, like many companies, we invested in plant and people ahead of the work.

‘‘We’ve invested more than $1 million in capital just ensuring we have sufficient capacity to meet any demand.’’

Simon Carey, a Christchurchbased partner of Grant Thornton, said 73.2 per cent of South Island businesses surveyed expected an increase in revenue or turnover in the next 12 months. This was ahead of the 65.4 per cent of the surveyed North Island businesses which expected an increase.

Overall, 65 per cent of southern businesses were very or slightly optimistic, compared with 57.2 per cent in the North Island. The Christchurch rebuild was a major factor in the growing confidence.

‘‘Clearly there will be benefits across the country and in the past year we have already seen some businesses opening an office in Christchurch.’’

Photo: FAIRFAX NZ Captain confident: Richie McCaw, right, is the media face of Versatile Homes and Buildings and visited the Christchurch factory with parent company Spanbild’s chief executive, Peter Jensen.