Large earthquake hits New Zealand – day 2 and months to come

Many New Zealanders were woken on Monday just after midnight by the 7.5-magnitude earthquake centred near Hanmer Springs in North Canterbury. The effect of the initial jolt was felt from the bottom of the South Island to the top of the North Island. The Kaikorua area was the worst hit, and the earthquake was felt strongly in Christchurch, Wellington and Malborough.

One person was killed when a Kaikoura homestead collapsed, and another died of a heart attack at a property at Mt Lyford during the earthquake. Yesterday, Wellington was reduced to a ghost town while engineers assessed the damage to the buildings.

The devastating earthquake was captured by vibration monitors used in the construction of Auckland’s City Rail Link project, even though the sensors are not seismographs.

capture

The true extent of the economic damage is unclear, but Prime Minister John Key says it is likely to run into the ‘billions’. Key also confirmed the navy and air force were called in to evacuate tourists, from the Kaikoura area, which is currently ‘locked off from the rest of the country’.

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Photos by a NZDF helicopter: massive rockfalls in several areas in upper South Island.

Based on initial damage reports, ASB economists say South Island transport infrastructure and Wellington’s business district are the key areas that are vulnerable to short-term economic disruption. Many of the businesses around the Kaikoura area are reliant on the passing tourist trade, and will no doubt suffer while the transport infrastructure is being repaired. Although capacity in the construction industry is already stretched, damage repair will likely increase construction demand even further in the coming year. Stronger construction inflation should be expected.

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