A report from Deloitte explores how the Kaikoura earthquake affected Wellington in New Zealand, how resilient the city is and what would be the impact of an earthquake occurring slightly closer to Wellington.
The report estimates that there is a $1.25 million hit on regional GDP for every week Wellingtonians are working away from their primary office space and rehoused somewhere across the city.
Should a similar size earthquake occur directly under Wellington city, models suggest that New Zealand’s GDP could be almost $29 billion lower between 2017 and 2030. However, the report's findings show a reduction in the economic costs if the shocks were minimised owing to an intervention, such as proactive resiliency efforts.
The relationship between the building damage, labour supply, and insurance premiums versus economic costs is linear. Therefore, Wellington’s regional GDP is estimated to benefit $260 million for every one per cent reduction in these factors.
This highlights the importance of improving resiliency in the highly earthquake-vulnerable capital city. Investments today will see a stronger and better-prepared city for the unfortunate occurrence of any larger-scale event in Wellington.
The full report can be downloaded here