-
Source: Fraser Jeffery
The New Zealand economy, while not rebounding with fast growth, has shown itself to be pretty resilient over the last year or so, absorbing two massive earthquakes and a major finance company collapse.
That resilience can be put down to a good national insurance scheme in EQC and the strong showing of our agriculture export sector, which, in spite of a high Kiwi dollar, has had a very strong run thanks to high world prices.
In fact for New Zealand's farming sector life is actually looking pretty good.
The export returns are flowing at high levels for most sectors, not just dairy, and on top of that growing conditions are the best they have been in years.
There really should be plenty of smiles on farmers' dials at the National Field Days event in Mystery Creek this week.
But it is just as well farmers are doing especially well right now because the agricultural sector is going to have to shoulder more of the economic burden in coming months.
Yesterday's aftershocks in Christchurch look serious enough to once again delay the full-scale Christchurch rebuild and its associated boost to economic activity or GDP.
The short term impacts of the shakes, such as damage to infrastructure, will no doubt be dealt with fairly quickly and efficiently. Canterbury is good at that now.
Confidence
However the damage to business confidence could be more lasting.
Despite the government saying it won't delay reports into the state of land in Christchurch, there is going to be increased uncertainty about the timing of the rebuild, given the land is still shaking.
Uncertainly is not what business needs right now.
And if the rebuild is indeed pushed back then the upbeat economic forecasts of late from Treasury and the Reserve Bank will need to be revised.
Markets were certainly quick to price in a delayed recovery yesterday, with bench mark interest rates now tipped to increase in 2012 rather than December this year as signalled by the Reserve Bank last week.
The dollar also took a pretty big hit yesterday, with some commentators now questioning whether the new quakes will further expose New Zealand's high private debt levels to the eyes of world investors and credit rating agencies.
New Zealand's reserves are running thin. Absorbing another big shock will be difficult. We need time to build up the EQC kitty again and get the economy on a stronger footing.
Yesterday's unwelcome shakes are a stark reminder of our vulnerability and that makes people nervous.
So don't dwell on those high cheese prices when you see farmers smiling at Field Days this week. It's not often they get good prices and good growing conditions at the same time in this country.
While you'll never hear a farmer say it, it's got the potential to be dream run.
For New Zealand and Canterbury's sake I hope it is.
Read more Corin Dann opinion .
Latest NZ News Video
-
ONE News Minute 9am update: May 26 (1:00)
-
Kids cough up $14m for Government (1:50)
-
Education ministry 'barbaric' (1:55)
