There is an interesting piece in the latest issue of Asymmetric Information – quarterly publication of the New Zealand Association of Economists – about the economic impact of the 1931 Napier earthquake (see photo) and how it can be applied to that of Christchurch. Written by NZIER economist Shamubeel Eaqub, the outlook for the Christchurch economy is more positive that what the media hype would suggest.
The Napier earthquake led to a 45% decline in regional GDP. The Canterbury quake caused approximately NZ$15bn or 50% of regional GDP. But after 1931 the region picked up strongly, with a massive reconstruction effort and flood of regional migration. In Canterbury two industries that are imperative for the Canterbury economy that were on the whole unaffected were factory production and agriculture. Ultimately all earthquakes provide the stimulus to further infrastructure development. Although tourism is a much bigger part of the Canterbury economy than that of Napier, other countries haven’t experienced major downturns in their tourism industries. Following the tsunami that affected Sri Lanka tourist numbers fell 43% in the first 2 months. However by 6 months tourist numbers were at normal levels and at a record high in 2010.