Ashburton District Quarterly economic monitor - June 2019

Overview

Indicator Ashburton District Canterbury Region New Zealand
Annual average % change
Gross domestic product
2.0%
1.7%
2.5%
Traffic flow
0.9%
0.8%
1.5%
Health Enrolments
-0.2%
1.7%
1.8%
Consumer spending
3.3%
2.5%
4.0%
Residential consents
-1.8%
-0.06%
5.8%
Non-residential consents
-26.0%
3.7%
7.9%
House prices*
0.5%
0.4%
1.4%
House sales
11.0%
3.1%
-0.9%
Guest nights
1.9%
2.6%
1.3%
Tourism expenditure
3.7%
4.5%
3.2%
Car registrations
-4.1%
-9.7%
-8.6%
Commercial vehicle registrations
-3.6%
-6.8%
0.3%
Jobseeker Support recipients
10.3%
17.0%
9.6%
Level
Unemployment rate
1.9%
3.7%
4.1%
* Annual percentage change (latest quarter compared to a year earlier)

Overview of Ashburton District

Infometrics provisional GDP estimates show that Ashburton’s economy grew by a solid 2.0% in the year to June 2019, just ahead of the Canterbury region at 1.7% and just behind New Zealand at 2.5%. Traffic flows in the district also grew faster than Canterbury, up 0.9% for the year compared to 0.8% for the region.

Ashburton dairy farmers are expected to receive $1,002m for the 2018/19 season, down $32m from the season prior due to successive downward revisions in the farmgate price. Fonterra has indicated a wide potential farmgate price for the coming season, but it is likely to be the same if not higher than last season. Having three years in a row of solid pay-outs should give farmers confidence to invest in their future, a positive for communities and businesses supplying the dairy sector.

In the year to June, commercial vehicle registrations dipped down by 3.6% but remain much higher than the long-term average. The value of non-residential building consents fell 26%pa, driven by a reduction in farm building consents, but still sits in line with the long-term average for the district.

Health enrolments eased down a touch in the year to June, indicating flat population growth for the district. Consumer confidence is steady, with spending growth of 3.3% in the year to June. Car registrations were down by 4.1%, less than the national decrease of 8.6%, but still at a relatively high level. The unemployment rate was 1.9% for the year, and has been stuck around 2% since 2014, indicating a very tight labour market.

Ashburton’s housing market has broadly followed the rest of Canterbury over the past year. House values have grown by a marginal 0.5%pa compared to 0.4% for Canterbury, underpinned by a growing number of sales. The number of residential dwellings consented has reduced by 1.8%pa but remains comparable to the long-term average for the district.

The district’s tourism sector has been growing steadily, with guest nights at commercial accommodation up by 1.9%pa, and visitor expenditure up by 3.7%.

Overview of national economy

The New Zealand economy continues to perform well, but concerns are growing about the future, with a long, slow, slowdown expected over the next few years. The Reserve Bank’s aggressive cut to the official cash rate (OCR) to 1.00% reflects a deteriorating economic outlook as both business and government investment remains poor, inflation remains low, and the employment outlook softens. With slowing population growth expected to eventuate before the end of the year, the focus turns to consumer spending and whether it can prop up economic growth, or if it too succumbs to global and domestic uncertainty.