Ashburton District Quarterly economic monitor - September 2019

Overview

Indicator Ashburton District Canterbury Region New Zealand
Annual average % change
Gross domestic product
0.9%
1.9%
2.4%
Traffic flow
0%
-0.8%
1.3%
Health Enrolments
-0.8%
1.7%
2.0%
Consumer spending
1.2%
1.9%
3.4%
Residential consents
-10.2%
12.2%
12.0%
Non-residential consents
0.3%
23.1%
12.7%
House prices*
2.2%
2.2%
1.9%
House sales
7.7%
3.3%
-0.7%
Guest nights
-3.9%
1.3%
1.2%
Tourism expenditure
3.1%
3.0%
3.1%
Car registrations
-9.8%
-11.1%
-8.5%
Commercial vehicle registrations
-5.2%
-5.1%
-1.6%
Jobseeker Support recipients
14.0%
15.4%
10.3%
Level
Unemployment rate
2.7%
3.7%
4.2%
* Annual percentage change (latest quarter compared to a year earlier)

Overview of Ashburton District

Indicators this quarter show that Ashburton’s economy has been performing modestly. Infometrics’ provisional GDP estimates show that the district’s economy grew by 0.9% in the year to September 2019, just below half the growth rate of Canterbury and New Zealand overall. Statistics New Zealand’s annual estimates show that Ashburton’s population grew by a steady 1.2% in the year to June 2019, reaching 34,800. This growth is slightly below the national average of 1.6%.

Unemployment in the district remains at a very low 2.7%, reflecting a very tight labour market. Jobseeker support recipients have grown by 14.0% over the year to September 2019, which largely follows the national trend.

The district’s housing market has grown modestly, with house values up 2.2% and sale volumes up 7.7%. Residential building consents dropped down by 10.2% over the past year, and are generally easing back after a busy period earlier in the decade. Non-residential building consents remain around the long-term average level, providing a steady workload for the construction sector.

Upward revisions in dairy payouts point to an expected payout of $7.05 per kg of milk solids in the 2019/20 season, leading to an additional pay-out of $20m to Ashburton farmers compared to last season. With uncertainty in the farming community around carbon and freshwater regulations, we expect much of the extra payout to go towards debt, rather than flowing through to on-farm investment and rural suppliers.

Vehicle registrations have fallen faster than the national trend, with car registrations down 5.2% and commercial vehicle registrations down 9.8%. Consumer spending has grown by a modest 1.2%, and it is likely that population growth alone has driven this. Altogether, this would suggest neutral consumer confidence in the district.

Overview of national economy

Warning signs continue to appear for the direction of the New Zealand economy over the next few years, even as current activity remains solid. There is a growing divide between current activity and the outlook for the future, with global and domestic uncertainty at odds with current demand-led growth. There are both upside and downside risks to the future direction of travel, although on balance a deteriorating economic outlook is more likely. An expected pick-up in the housing market over 2020 has the potential to draw the economy out of the doldrums, but continued slower global economic growth, low domestic investment, and slowing spending growth could tip the economy in the other direction.