Saturday, 17 November 2018

WHITIANGA WEATHER

Strong start to the year for the Coromandel economy

The Coromandel economy started the year with a hiss and a roar, growing at its fastest rate in recent years.

Infometrics' latest quarterly report estimates Gross Domestic Product (GDP) in Thames Coromandel was $1,087 million for the year to March 2018.

That's 4% higher than the same time last year, representing the most rapid growth rate in three years.

Annual growth also outpaced that of the wider Waikato region (3%) and New Zealand as a whole (2.7%).

Thames Coromandel District Council's Mayor Sandra Goudie welcomes the new figures - representing an economy that's firing on all cylinders.

"It's no surprise the summer months are always the strongest for our economy, when we have our huge swell in visitors," Mayor Sandra says. "But it's really positive to see a broad range of factors underlying our growth in this report.

"Beyond tourism, business is doing well, particularly forestry and agriculture, indicating greater depth in our economy."

The low unemployment rate - at a 10-year low - continues to be a highlight of the latest economic data.

Infometrics estimates Thames-Coromandel’s unemployment rate averaged 2.9% across the March 2018 year – down from 3.6% a year earlier and our lowest level since 2008.

The local unemployment rate is lower than that of rest of New Zealand, where the unemployment rate averaged 4.6% over the year to March 2018.

The average number of people receiving Jobseeker Support in our district fell 8.2%.

"These improvements are all the more remarkable given that elevated migration inflows have significantly added to the labour supply," Mayor Sandra says.

"Investment by local businesses continues to open up better job opportunities and our Council is serious about doing what we can to support our business people and entrepreneurs who create jobs by establishing and investing in business on the Coromandel."

 

What's fueling the economy?

Growth in retail spending and the number of residential building consents issued stood out as leading the pace of growth in the region.

Electronic card retail spending increased 7.8% over the year. Infometrics noted that willingness to spend was not a surprise given the improvements to labour market conditions that occurred in both Thames-Coromandel and in neighbouring districts.

A total of 77 new residential building consents were issued in Thames-Coromandel District in the March 2018 quarter, compared with 68 in the same quarter last year. On an annual basis the number of consents increased 15% on the previous year, while the national increase was 2.5%.

 

Primary sector continues to grow strongly

Infometrics economists point to strong returns for key parts of Thames-Coromandel’s primary sector.

Forestry prices are sitting at record highs in New Zealand dollar terms, as local and export demand is high. Data from ANZ Bank indicates seafood export prices rose by an average of 2.5% in the March 2018 year, and have climbed more than 35% over the past five years.

Infometrics estimates the dairy payout in Thames-Coromandel will total $56M for 2017/18, compared with a payout of just $36M at the trough two years ago.

 

Visitor economy goes from strength to strength

Total visitor spending in Thames-Coromandel climbed 6.4% to a record $366M in the year to March.

Commercial guest nights rose 6.4% over the year, while Infometrics estimates show that Airbnb guest nights during the summer months rose 61% from a year ago.

Airbnb guest nights over the past twelve months were equivalent to approximately 21% of the number of commercial guest nights.

Hand-in-hand with growth in tourism, traffic flows in the district soared 8.3% over the year, close to twice the growth rate seen Waikato (4.5%) and 2% nationally.

That's despite the rise in vehicle running costs, with petrol prices currently sitting more than 10% higher than their levels in late 2018.

 

Outlook for economic growth

Infometrics’ latest forecasts see New Zealand’s economic growth slowing to 2.4% pa by the end of this year and slipping below 2.0% pa during 2019. A range of factors have combined to drive the slowdown, many of which can be sheeted back to government policy.

"It is becoming clearer that the transition phase of new government policy could result in a less buoyant economy over the next couple of years," Infometrics says in its report.

 

Results at a glance

Annual average percentage change

· GDP +4%

· Traffic flows +8.3%

· Residential consents +15%

· Non-residential consents -4.4%

· House prices +7.6%

· House sales -27%

· Guest nights +6.4%

· Retail trade +7.8%

· Car registrations -0.3%

· Commercial vehicle registrations +10%

· Job seeker support recipients -8.2%

· Tourism expenditure +6.4%

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