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Tuesday, March 8, 2011

9000 jobs could go in employment aftershock

9000 jobs could go in employment aftershock

Last updated 05:00 08/03/2011
About 9000 people in Canterbury could lose their jobs in the next three months following February's devastating earthquake.

Westpac has forecast the Canterbury economy to shrink 15 per cent this year and unemployment to rise to 7 per cent nationally by June from about 6.8 per cent now as a result of the destruction to business and homes from the latest earthquake. Westpac senior economist Dominick Stephens said the rise in unemployment implied the loss of about 9000 jobs and most of those were likely to be in Canterbury.

Already 3171 people have taken the job loss cover offered by the Government, the latest update from the Minister of Social Welfare's office shows. That cover is a $400 a week in-the-hand payment for six weeks to fulltime employees, and $240 for part-time employees. These were employees unable to contact their employer or whose business had closed permanently.

While the picture for Canterbury is gloomy this year, Westpac sees rapid growth from next year when reconstruction of Christchurch begins in earnest, although that does not imply an earthquake is good for the economy.

"When the insurance paperwork is done there will be a huge influx of money into the Canterbury region from overseas and central government, all earmarked for construction in Christchurch."

Westpac says national GDP will shrink 2 per cent and is basing that on an early estimate of $15 billion in fresh damage from the latest quake. House sales in Christchurch were likely to drop substantially.


$9b in damage to residential housing and contents.

$3.5b in damage to commercial and industrial buildings, compared to a total capital value of $15b.

$2.5b of damage to government and council infrastructure assets, compared to the total value of Christchurch's infrastructure assets of $4.6b.

Unemployment to rise to 7 per cent nationally by June. That implies loss of 9000 jobs, most of those in Canterbury.

Government earthquake package is supporting 29,567 employees with more than 5600 employers.

- The Press

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