The Financial and Insurance Services sector includes units mainly engaged in transactions involving the creation, liquidation or change in ownership of financial assets. This includes activities such as banking, monetary control, investment management; underwriting insurance and annuities; managing retirement funds; as well as the regulation of financial activities.
This sector has been a key driver of the local economy over recent years. The global recession and earthquakes resulted in a small contraction in GDP after 2007, which was not unexpected.
However, the industry has seen a significant GDP growth of nearly 50 percent over the past decade.
The Financial and Insurance Services sector was particularly impacted by dislocation as a result of the Canterbury earthquakes because many professional services businesses were located within the central-city area. However, many of these businesses were highly mobile and able to re-establish themselves reasonably quickly, although sometimes in less than ideal conditions.
Christchurch Quick Facts
- Contributes approximately $868 million to Christchurch GDP (Infometrics’ Estimate year ended June 2014, $2010)
- Accounts for around five percent of GDP in Christchurch
- Around 2,647 business units are based in Christchurch (2013, Statistics New Zealand)
- Has around 4,220 employees (2014, Statistics New Zealand)
|Financial and Insurance Services Sector Employment Breakdown, 2014|
|Source: Statistics New Zealand|
|Sub-sector||Employee Count||% of Total|
|Insurance and Superannuation Funds||1410||33%|
|Auxilliary Finance and Insurance Services||1090||26%|
Exporting of Services
With technology reducing barriers to doing business internationally this sector is increasingly able to export its services, thanks to New Zealand firms offering labour at competitive wages as well as time-zone advantages. Presently we cannot capture the value of this activity, but anecdotally we are aware of a number of firms exporting architectural, financial, management, engineering and scientific services offshore.
After the earthquakes, many firms were displaced from the CBD and had to relocate to the suburbs. This has added challenges to the sector as it reduces the collaboration between firms and disciplines that was characterised by their presence in the CBD. On a positive note, early indications are that these firms will be anchor tenants in the redeveloped CBD.
The Christchurch rebuild provides an opportunity for this sector to attract talented professionals to the city. Due to the complexity and cost of the rebuild, an increased number of lawyers, accountants, finance/investment and employment specialists will be needed. This will result in the development of local talent and the attraction of new talent to the city. Many of
the firms will be involved in projects that will significantly increase their capacity to compete for offshore work in the future.
Growth in Agricultural Sector
Agriculture is a key driver of the city’s service sector. The Financial and Insurance Services sector is both a beneficiary and enabler in assisting the development of land and water resources.