Dunedin City Quarterly economic monitor - December 2018

Overview

Indicator Dunedin City Otago Region New Zealand
Annual average % change
Gross domestic product
2.9%
3.5%
2.8%
Traffic flow
2.3%
3.9%
2.7%
Health Enrolments
1.9%
2.5%
1.9%
Consumer spending
5.0%
6.6%
4.5%
Residential consents
-2.6%
-11%
6.1%
Non-residential consents
-3.0%
6.8%
9.0%
House prices*
14%
11%
2.6%
House sales
3.6%
1.6%
3.5%
Guest nights
3.0%
4.0%
2.3%
Tourism expenditure
6.2%
8.6%
4.3%
Car registrations
-6.3%
-6.2%
-6.7%
Commercial vehicle registrations
5.6%
8.1%
1.6%
Jobseeker Support recipients
-2.8%
-1.7%
4.8%
Level
Unemployment rate
6.5%
3.9%
4.3%
* Annual percentage change (latest quarter compared to a year earlier)

Overview of Dunedin City

Infometrics provisionally estimates that Dunedin’s economy expanded by 2.7% over the December 2018 year. This growth follows a revised 2.4%pa expansion in 2017. Traffic flows in Dunedin are rising at a similar level, up 2.3% in 2018.

Infometrics recently released Regional Economic Profile shows that Dunedin’s economy added 1,646 jobs in the March 2018 year, taking total job numbers to 63,737. The key contributors to this jobs growth were construction (304), professional, scientific and technical services (230), education and training (221), other services (173), health care and social assistance (117), and retail (116). Despite a slight increase in the December quarter, the number of people receiving Jobseeker Support still fell by an average of 2.8% across 2018.

These strong job prospects are pulling people to Dunedin to live. Given the ongoing delays in the release of Census data and the removal of airport departure cards, we have recently begun using enrolments at primary health providers as a timely proxy for population growth. The data shows that health enrolments in Dunedin City grew 1.9% across 2018.

Against a backdrop of an expanding population and improved job prospects, there has been a sharp increase to consumer spending. Data from Marketview shows that purchases on electronic cards climbed 5.0% in 2018 following 4.2% growth the previous year. Ongoing growth in the visitor economy also added to this consumer spending lift. Visitor spending in 2018 climbed 6.2% to a record $776m, while guest nights in commercial accommodation rose 3.0%.

At first brush, headline figures of building consents in 2018 appear to show a softening. However, scratching beneath the surface shows that residential consent numbers bounced back in the December 2018 quarter off the back of a large number of townhouse consents.

Overview of national economy

Throughout 2018, business confidence indicators suggested the New Zealand economy was going to crash and burn. But although growth slowed slightly, there were no other signs we were staring down the barrel of a full- blown recession. Looking to 2019, New Zealand’s domestic economy remains in a similar position to 12 months ago: prospects of middling growth, somewhat hampered by capacity constraints and a tight labour market, and with some of the biggest potential shifts being driven by government policies (such as migration or the housing market). In contrast to this largely unchanged domestic picture, many question marks have appeared during the last year over the international economic environment.