Business Environment 2016

As we settle back into our work after hopefully a little bit of time off over the holidays it is useful to consider a broad brush assessment of external and internal economic factors as they will affect business in the coming year.

On balance the businesses of Christchurch and Canterbury are well placed, to operate in a positive business environment involving increasing certainty and hopefully prosperity. It is however a mixed bag. Dealing with the macro picture first, we can expect exchange rates to be more conducive to supporting exporters. That is important for a region like Canterbury being so dependent on export income. The offset of that is potential for increasing price pressures on imports. However, even that is mixed given the downward pressures on fuel prices and how important the cost of imported fuel is to our ongoing economic activity.

Interest rates can be expected to remain low throughout 2016. We are into a new era of a locked in low interest rate regime, which is good for borrowers and not so good for savers. Linked to low interest rates is inflation, currently continuing at record low levels with no significant signs of any upward pressure.

We can expect continuing pressure on dairy prices which does have a significant impact on our overall economy. On the other hand other exported products, particularly some meat products, are holding up well. We should be wary however of continuing volatile climatic conditions and the potential impact that will have on farm earnings and export volumes. Once again current climatic conditions are clearly demonstrating the importance of certainty of water supply which underpins investment in irrigation. Tourism, another significant export earner is showing significant upside, particularly with increased visitations by free independent Chinese travelers. This will continue to increase over 2016, despite some concerns about the Chinese economy. It will put pressure on South Island infrastructure generally and we need to be aware of that and prepare for it.  

From a Christchurch city perspective the rebuild in now tracking with more certainty than ever. By the end of this year SCIRT will have finished its horizontal infrastructural commitments, the central city retail precinct will be up and running and residential rebuild will be continuing at a pace. I predicate that 2016 will be the year that we complete 50% of the required construction in our city. That is a significant milestone, but of course, it also means we still have 50% to go and a lot of spending and investment yet, in the regeneration of our city.

Underpinning the $100 million a week being spent specifically on the rebuild we continue to have a strong local economy driven by increasing service industry activity, a robust manufacturing sector, strong retail and the indirect benefits coming from the rebuild of Christchurch city. Aside from the private sector commercial activity we have increasing confidence in education at all levels in our community with some good signs with respect to overseas students returning to secondary and tertiary level education in Christchurch and bringing valuable foreign exchange with them.

Our health sector is a very important contributor to our economy with Canterbury District Health Boards budget well in excess of $1 billion and the demand on the whole sector being higher than ever. We must always remember as participants in the business sector the psycho social consequences of the earthquake are still playing out and will continue to impact our people as they go about their business. That issue will require additional resourcing.

To a greater or lesser extent will are all dependant on business activity whether it’s through its ability to generate employment, to pay taxes to service our public sector needs or to generate ongoing wealth. The interdependancy between a healthy community and a healthy business sector is compelling. We are in a good space in Christchurch and Canterbury and we can be confident as we go into 2016.

petert@cecc.org.nz
cecc.org.nz

It's been a big year!

It has been a big year in Christchurch and Canterbury.  We have made good progress across our city,  which  we can expect to ramp up in the New Year. The money is being spent and it is really starting to show.

2016 will be  another big year with $100 million  per week being invested in the rebuild and by October you will be able to enjoy a nearly complete central city retail precinct.

2016 will be the year we get to be 50% through the rebuild in terms on dollar spend.

Across Canterbury much has been done through the good work of the Mayoral Forum to clarify regional vision and identify what needs to be done to achieve it.

It's also good to see progress being made on the Urban Development Strategy Refresh Project which will create a vision and framework reflecting our common values, principles and direction for how Greater Christchurch will look, feel and function in our future. There is an initial workshop 'Our Place' on 1-3 February to discuss  a draft shared vision, underlying values and a demonstrable commitment to work together. Having a strong business representation is critical so that the conversations cover the breadth of ideas and aspirations to form a shared perspective. I strongly encourage member organisations to step up and contribute to this initiative. To signal such a desire please email ourplace@greaterchristchurch.org.nz for more details and to register.

We live in a remarkable  part of the world  full of real opportunity. It is up to all of us to realise those opportunities.

But right now, as we wind up another exhausting  12 months, it is time to relax, enjoy family,  friends and pay special attention to those who continue to need support.

Merry Christmas and all the best for 2016.

Peter T

petert@cecc.org.nz
cecc.org.nz

We are underway at 57 Kilmore Street!

After five years of sorting out insurance claims, demolition, land issues, designs, contracts, consents and the finer details of a new build we are seeing real progress at 57 Kilmore Street.

We are on track to have a new  purpose built, highly functional home for the Chamber ready for occupation in mid-2016.

That is a real relief, given that the hard working team at the Chamber has moved three times on the way back home and is currently operating in relatively cramped conditions in our Colombo Street premises.

We are also aware of the frustrations created for our membership by not having a permanent home.

We are very grateful to all of those who have assisted us on the way through and very excited about getting back to our own premises next year.

The new building will have the capability to host most membership training programmes and events. It will also future-proof the accommodation needs of our team for years to come.

Keep an eye on progress as we go into the new year! 

We are proud to continue to commit to the central city and  pleased that we will be returning to one of the most vibrant and progressive areas of Christchurch.

petert@cecc.org.nz
cecc.org.nz

The Great Debate - 'The rebuild of Christchurch is leaving our young professionals out of the loop'

Come along and support me and my team (Councillor Ali Jones and Shaun Hubbard, Regional Manager SI, AECOM) as we take on the Young Professionals in The Great Debate!

Comedian and writer Joe Bennett is our MC for the evening and will do his best to keep us in check as we argue the hot topic 'The rebuild of Christchurch is leaving our young professionals out of the loop'.

What a great opportunity for the Chamber and established business leaders to engage and interact with some of Christchurch's young, talented professionals. I'm sure of course, that the older, wiser team will definitely come out on top, but bring it on!

Find out more here.

petert@cecc.org.nz
cecc.org.nz

 

Speaking of trivia - observations throughout Europe!

I have recently returned from a holiday in Europe. It is always good to get outside of New Zealand from time to time and look back into our country. It tends to give you an appreciation of what a good place New Zealand is to live and how sometimes we get pre-occupied with trivia when compared to the challenges the rest of the world have. 

Speaking of trivia here are a few observations of mine from my travels throughout the UK, Spain, Italy and the Netherlands:

1. Smoking is still pervasive in Europe. Smoking in restaurants in most of the countries I visited is common and young people in particular seem to be doing an awful lot of it.
2. Tattoos are in vogue. Again the young predominated, but intensive tattooing with brightly coloured tattoos seemed to be common among the Europeans.
3. I think I had two drinks of water out of taps while I was in Europe. Everyone is consuming water out of bottles and there must be millions of plastic bottles filled with water from consumption every week in Europe. The fact that local tap water is not fit to drink is really an indictment on us all.
4. The roading systems in Europe are functioning well. Italy in particular impressed me with the quality of its motorways. Of course you pay for them through tolls and it is not cheap. But they are highly efficient, fast, safe and well designed.
5. We hear a lot about economic crisis (particularly in Greece), the refugee situation, and the troubled interface between Eastern Europe and Russia. While all those issues are rumbling away in the background as you interact with Europeans, generally speaking they are not at the forefront of conversation. 

I found Europe to be generally in a relaxed mood with people simply getting on with their lives. Of course it is always great to come back to our beautiful country with clear skies, blue rivers and lots of wide open spaces. We really should continue to appreciate how lucky we are.