0 The good news continues...

After all the political drama this week, it's nice to know that the economy is ticking along at a good, strong pace; the Herald reports:

Propelled by the construction sector, the economy kept expanding at a brisk clip in the March quarter.
Output grew 1 per cent to be 3.8 per cent up on March last year, up from a 3.3 per cent annual pace in December.
It is the third quarter in a row that gross domestic product has grown 1 per cent or better.
Although it is slightly softer than the 1.1 per cent the Reserve Bank (and the market consensus) had forecast, revisions to previous quarters meant annual growth was stronger than expected, leaving less spare capacity in the economy.
Growth was heavily concentrated in the construction sector, whose 12.5 per cent increase (the strongest for 14 years) accounted for two-thirds of the rise in quarterly GDP.

Quarterly growth of 1% and an annual GDP growth rate of 3.8% for the year to March is a very good result. The fact that the construction industry is leading the way is not surprising, but it is pleasing to know that growth in construction is taking place right across the country, not just in Christchurch.

Wanganui is often regarded as a real estate backwater. But as we have mentioned in the past, friends own a business supplying the building trade. They are as busy at the moment as they have ever been. Residential constriction is vibrant, and there are at least three major commercial projects underway in Victoria Avenue alone.

That is a sign of confidence in the economy going forward. Businesses like Farmers, Briscoes and Rebel Sport would not be committing to long-term leases in new premises such as those being built in the city if they were not optimistic about the country's economic outlook.

And the Government has been quick to compare our economy to those of a range of other developed countries or groups of countries:

The New Zealand economy is doing very well as the country recovers from a recession brought on by the Global Financial Crisis. Bill English's conservative economic policy mix has been shown to have been the right recipe for the times, and the economy is now reaping the benefits of his pragmatism.

It is certainly a good platform for any government to go to an election on.

0 More good news

Labour and the other opposition parties continue to bang on about a "housing crisis". It's true that housing supply is tighter and more expensive in places such as Auckland and Christchurch, but to call it a "crisis" smacks of election-year desperation.

Then again, every time that Labour and the GIMPs have declared something to be a crisis, it's been proven not to be, and already there are some very good signs with regard to housing supply. Housing Minister Nick Smith put out this presser yesterday:

Nick Smith

30 May, 2014

Building consent figures continue to rise

Housing Minister Dr Nick Smith has welcomed today’s release of the latest building consent figures from Statistics New Zealand which show the upward trend in the number of consents issued is continuing nationwide.
“There were 22,705 building consents issued across New Zealand in the year to April 2014 – the highest number of consents issued nationally in any 12-month period since the year to June 2008, and a 27 per cent increase on the same period the year before. This continues the trend of growth with the number of consents continuously rising since March 2011,” Dr Smith says.
“We are seeing this trend also reflected in Auckland and Christchurch. In Auckland, more building consents were issued in the year to April 2014 than in any other 12-month period since the year to February 2007, and a 41 per cent increase on the same period the year before.
“Meanwhile, Christchurch saw the highest number of consents in the year to April 2014 than in any other 12-month period on record, and a 103 per cent increase on the previous year.

The record number of consents in Christchurch is especially good news, given the Government had to intervene last year to eliminate blockages in the consenting system at Christchurch City Council. More than double the number of consents were issued in the year to April 2014 compared to the previous year as the rebuild gathers momentum.

But it's not just Christchurch. Nick Smith singles out the accord between the Auckland Council and the Government for special mention:

“I hope to see this positive trend continue. Earlier this month I announced the third tranche of Special Housing Areas under the Auckland Housing Accord agreed to between the Government and the council. This has brought the total number of Special Housing Areas established to 63 with a potential yield of 33,500 homes across Auckland. We have also agreed to an Accord in Christchurch to help restore the city’s housing stock to pre-earthquake levels and ease the pressure on its rental and temporary accommodation markets.
“We recognise however that the housing challenge is not just limited to Auckland and Christchurch, and we have negotiations underway for further Housing Accords in Wellington, the Bay of Plenty and Queenstown.
“We also have a complementary programme of work underway which includes reducing building material costs, reining in development contributions, cutting compliance costs, investing in skills and productivity in the construction sector, and supporting first home buyers through our Welcome Home Loan and KiwiSaver First Home Deposit Subsidy schemes.
“Today’s figures confirm the Government is making good progress in addressing New Zealand’s housing challenge. There is no magic bullet to solving the housing challenge but we are on the right track and delivering real results.”

Nick Smith is right; there's no one single magic bullet to solve housing supply issues, which is why the Government has introduced a range of initiatives as outlined. The good news today is that there are signs those measures are working, whereas Labour's solution is to slash immigrant numbers, even though the issue is far more complex than just that.

We talked with a friend during the week who owns a business here allied to the building trade. The business has been run off its feet this year, as housing booms, even in the provinces. A recovering economy, and a surge in business and consumer confidence has breathed life into the construction sector. That's good news for everyone.