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The upside of disaster

The upside of disaster (Thinkstock)
Is it wrong to look forward to a boost in our economy because of others' misfortunes? It's hardly schadenfreude, but it still feels a bit off to welcome increased log exports to Japan and a "massive" rise in construction in Christchurch.

Estimates so far have suggested as many as 10,000 homes will need to be demolished in Christchurch, with the cost of rebuilding going as high as $9 billion. Economists had forecast there would be 15,000 new houses built this year, and are now expecting 63,000 from 2012 to 2014.

It's not just due to the earthquake, though. The rate of new houses being built in New Zealand was not going to cover annual population growth as it was. The construction rate for residential property is estimated to rise 41 percent in 2012 and about 20 percent in 2013 to make up for this shortfall.

With an average population growth of 1.2 percent per year, 52,000 people are being added to the NZ population every year. The rate we were building houses was only creating room for 35,000 more people.

Construction companies, builders, electricians, plumbers, real estate agents and many others are probably relishing the upcoming increase in house construction. So on one hand, it appears to be a boost to our sluggish economy. But on the other hand, the earthquake will cost the country in the long-term in ways we don't yet know about. For example, suggestions of scrapping interest-free tertiary loans and the KiwiSaver subsidy might not affect us much now, but will have an impact on future generations' study and work careers.

Meanwhile, Japan could soon be needing our logs. They're on the lookout for thousands of prefabricated temporary houses after the recent tsunami. A timber mill that produced up to 25 percent of Japan's plywood has reportedly been destroyed, and Japan was already one of the world's largest importers of wood products. They're New Zealand's fourth largest importer of logs, and they'll need plenty of those to rebuild in the coming months.

But as we look forward to the boom in industry, is the overall cost of natural and human-created disasters becoming untenable? The total cost more than tripled in 2010 to US$218 billion. And 304,000 people lost their lives, compared to 15,000 in 2009.

User comments
Mandi, I must disagree with your argument. As a country we are producing agriculturally more than ever. In fact NZ produces so much more than it needs that we are able to export in huge quantities. Farmers and Exporters are always going to be influenced by the demand from foreign markets and the higher prices that they are willing to pay. It is this factor that has such an impact on our own local markets. Look to lobby Government for price and market regulation. Population control will only have a very small impact on your points raised, far less than any regulation can impact. Unfortunately Government is unlikely to heed these public concerns as the NZ economy Is so reliant on income from exports to foreign markets.
You can't force people to take your advice were not in Egyptian times, that's what natures for. When there's too much of the same species in one area a tidal wave hits or an earthquake. It's just natures way of depleting half the population that lies in these countries.
It is about time the government makes it law that women should only be aloud 1 child per family! It is not suprising why food is so expensive etc. The population growth is getting out of control and the urban areas are getting bigger and bigger and the farms smaller and smaller and soon we wont have enough farmers to provide us with food. Expenses are only getting so bad because of the high demand of things.

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