Recession, the rebuild after Cyclone Gabriel and a fly in the ointment (March 13, 2023)

Natural disasters like Cyclone Gabriel can have a significant impact on the economy, both in the short and long term. In a short time, disruption to supply chains, loss of infrastructure, and increased costs can slow economic activity.

However, in the long term, disasters can create opportunities for growth and development.

For example, the rebuilding process can stimulate economic activity and create jobs, and investments in infrastructure can promote long-term growth. Responding to disasters can unite communities and foster resilience, strengthening social and economic ties.

Natural disasters like Cyclone Gabriel are a reminder of the importance of preparedness and resilience. Governments, businesses, and individuals can take steps to mitigate the adverse effects of disasters and promote long-term growth and development. By staying informed and proactive, we can emerge stronger on the other side of a disaster.

Some emerging consensus is that the recovery phase may boost economic activity—according to Infometrics—should we have the capacity to manage the rebuild.

Economics consultancy Infometrics Principal economist Brad Olsen told Radio New Zealand, “Cyclone Gabrielle could make this year’s expected recession more shallow, as economic activity would increase during the rebuild, but the Reserve Bank still had more work to do to combat inflation.

“Looking ahead, we expect that the floods in Auckland and the massive disruption from Cyclone Gabrielle will dampen economic activity at the start of 2023 before providing an artificial boost to growth as the recovery swings into action,” he said.

Capacity may be a fly in the ointment.

Malcolm Davie, the owner of the Pheasant Farm apple orchard in Eskdale, summed it up to media, “We need more diggers, more resources, more money, and more people.”