The historically high number of New Zealanders currently emigrating to Australia, especially from Christchurch, could see labour shortages emerge and hamper reconstruction after the spate of earthquakes in the city over the past 10 months, says Moody's.
Katrina Ell and Fred Gibson, associate economists at Moody's Analytics (a sister company of credit rating agency Moody's Investors Service) in Sydney, say they expect the New Zealand economy to have contracted 0.2% quarter-on-quarter in the first (March) quarter this year. Statistics New Zealand is due to release the number tomorrow. They also note that migration to Australia in May was the highest for a May month in more than 30 years.
"Christchurch residents were a high proportion of movers," Ell and Gibson say. "It is hardly surprising that workers from Christchurch are seeking employment abroad when anecdotal reports point to construction workers not receiving payment for jobs."
"Given the expectation of a surge in demand for such workers when reconstruction efforts begin later in the year, this could inhibit recovery efforts."
According to Statistics New Zealand, a net 3,312 people permanently departed from New Zealand to Australia during May, surpassing the previous May record of 2,900 set in 1979. Departures of Christchurch residents totalled 800 in May, up from 500 in May 2010. Since the devastating earthquake on 22 February that killed 181 people, the city has experienced 1,300 more departures and 400 fewer arrivals than in the same period of 2010, Statistics NZ says.
Fletcher Building CEO Jonathan Ling, whose company has a key role in the Christchurch rebuild, recently told interest.co.nz that the rebuild can't get properly underway until the aftershocks tormenting the city come to an end. Ling said the actual physical rebuild, once it could get underway, wasn't a complex job and the workforce, contractors and materials were ready to go.
The economy grew 0.2% in the December 2010 quarter.