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Damage and spend: the economic cost of Cyclone Gabrielle

Business / analysis
Damage and spend: the economic cost of Cyclone Gabrielle
Auckland flood damage
Flood-damaged carpets and furniture are piling up across Auckland as the region cleans up after the storm flooding. (Image: Rebecca Stevenson)

Cyclone Gabrielle will be NZs biggest weather event this century, but the economic damage is still unknown.

Damage to homes, infrastructure and agriculture is significant, and will lead to a drop in economic activity as people are stuck at home, unable to open their business or have crops under water that can’t be harvested and sold.

There will be an immediate localised impact, particularly in those hardest hit areas like the Hawke’s Bay, which relies heavily on agriculture and particularly horticulture, to underpin its economy.

Federated Farmers says Cyclone Gabrielle’s destruction is unprecedented, and for some farm businesses this will be a body blow. 

Moody’s Analytics says the poor NZ weather will disrupt food supplies, and contribute to an inflation spike in the first half of this year.

Food prices have been running rampant and were up 10.3% in the year to January 2023, with fruit and vegetable prices increasing 16% compared with the previous year.

Food prices will be pushed higher as a result.

And Moody’s says construction costs will also jump, as huge demand is unleashed from the repairs and rebuilds.

For retail and hospitality, or anyone reliant on tourists, this weather couldn’t come at a worse time; what should have been a peak after several disrupted summer seasons.

Westpac Bank says tourist numbers were back at around two-thirds of the pre-Covid level before Auckland’s wild weather, and New Zealand’s tourism sector was making the most of being back open for business.

For those now closed and unable to cash in, it’s a kick when they’re down.

The overall economic impact will be substantial, with Finance Minister Grant Robertson saying Cyclone Gabrielle will have a multi-billion dollar price tag and maybe as much as $13 billion.

Robertson says the bill will be smaller than the covid-19 pandemic, but comparable to the Kaikoura and Canterbury earthquakes.

The Covid-19 Response and Recovery Fund totalled $61.6 billion. This funding included about $20 billion paid out as wage subsidies and resurgence payments to businesses, and was a national response to the pandemic.

Auckland’s Delta covid lockdown alone was estimated to have cost the economy $8 billion.

The 2016 Kaikoura quake damaged the main road and rail link, and the cost of that quake was estimated at about $3 billion by Treasury, with more than $1.8 billion in insurance claims including close to $1 billion for high-rise building losses and claims in Wellington.

An economic report found this quake resulted in a $500 million hit to New Zealand’s GDP in the 18 months afterwards.

The bill from the Christchurch earthquakes was much larger again, at about $40 billion.

These earthquakes cost private insurers more than $21 billion and EQC paid out about $10 billion.

After Christchurch more than 7,000 homes were red-zoned and 1,354 commercial buildings needed to be demolished.

Already, the transport ministry, Waka Kotahi, has estimated the damage to roads during just the North Island flooding before Cyclone Gabrielle may cost $1 billion to fix the roads.

And then inflation?

We’ll get another spending boom as a result. This is of course, not good news for inflation, however, the insurance money is already flowing and will continue to flow, as people replace cars, couches and computers damaged in the storms and the clean-up turns to rebuild.

But there’s a fair bit of pain to get through first.

Robertson has hinted there would be "sector-by-sector" economic support packages, and more regional support.

Some in the Hawke’s Bay are pushing for a wage subsidy for those worst affected.

The Government has announced an $25 million rural support package, and $5 million for emergency support for businesses affected by the Auckland flooding.

It has set up an insurance claims resolution service to help settle claims for homeowners after a natural disaster.

The service will be modelled on claims resolution services used after the Canterbury earthquakes.

Insurers are warning there will be significant delays to assess and settle the thousands of insurance claims from the rugged weather.

The Insurance Council says the flooding and cyclone Gabrielle will mean a bigger bill for extreme weather events than the insurance industry paid out for the entire year of 2022.

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As per below, I do not think any region of NZ would be able to cope with these types of 24hr period rainfalls.  Not even sure you can adapt to such weather, You have to avoid building in areas that will be exposed to these events, or insure against them.   


Inland from the devastated Esk Valley, Glengarry recorded 546mm of rain, 400 mm of which fell in 12 hours. It had the region’s highest reading.

Exposed areas of the southern Hawke’s Bay coast reached 450mm during the cyclone.

“The eastern area of Wairoa is similarly exposed and was the other part of the region, alongside Glengarry, to get more than 500mm of rain.

“Gabrielle delivered about 320mm of rain to our Newstead site, in the western hills of the Ahuriri catchment near Puketapu, which is about one-third of the usual annual rainfall there – most of it falling within 24 hours.”

Council chairperson Hinewai Ormsby said the new data confirmed what those who lived through Gabrielle knew.

“This data reinforces the staggering amounts of rain we received versus what was forecast. It helps us understand how heavy the rain was in a relatively short period of time.


Stevenson has had stuff sent to her, which would make this a useful article.

As it is, it's nonsense. Dollars are related to nothing; keystroked into existence by banks full of people taught that the Earth is flat. Why value what has to be done, in such nomenclature? It's just silly.

There are the remaining resources of the planet; the physical ones. There is the remaining fossil-energy resource; the worst half, and there has never been more contention for it. Heck, Poms are being told to eat swedes (I woudn't mind, but I think they mean the vegetable).

Anyone wanting to really understand the predicament we face - and which this is merely a sub-part of, could do worse than download and read Thomas Homer-Dixon's Upside of Down.…

But spare me, counting the remaining planet in terms of debt-issued, related to nothing tangible, not-underwritten digits, is to miss the point in spades, at this stage in human affairs.

We need to be triaging, with a long-view, all issues on the table, and growth-forever financial constructs relegated to where they belong; in the dustbins of history.…

(note the 3 inflection-points happening NOW)