Hamilton City Quarterly economic monitor - December 2019

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Overview

Indicator Hamilton City Waikato Region New Zealand
Annual average % change
Gross domestic product
2.4%
3.1%
2.3%
Traffic flow
-0.2%
1.5%
1.7%
Health Enrolments
4.8%
2.9%
2.3%
Consumer spending
1.0%
3.8%
3.3%
Residential consents
13.4%
13.6%
13.8%
Non-residential consents
-9.1%
14.4%
5.2%
House prices*
5.9%
6.0%
3.6%
House sales
4.3%
0.8%
-1.0%
Tourism expenditure
-0.8%
3.6%
3.5%
Car registrations
-1.7%
-2.2%
-8.6%
Commercial vehicle registrations
-5.4%
-2.6%
-6.9%
Jobseeker Support recipients
8.3%
9.7%
10.6%
Level
Unemployment rate
4.7%
3.7%
4.1%
* Annual percentage change (latest quarter compared to a year earlier)

Overview of Hamilton City

Hamilton’s economic performance remained solid in the year to December 2019 year, with provisional GDP growth estimated at 2.4%, as compared to 3.2% for the Waikato region and 2.3% nationally. This figure reflects the national trend of slowing growth, declining from 4.7% in the year to December 2018. Consumer spending increased by 1% over 2019, once again representing a trend of declining growth in consumer spending, from a high of 4.4% in the year to September 2018.

Tourism expenditure declined by 0.8% in 2019, in contrast to increases of 3.6% for the Waikato region and 3.5% nationwide over the same period.

Housing demand in Hamilton appears to be on the rise, with the volume of house sales over the 2019 year increasing by 4.3% while house prices increased by 5.9% from December 2018. The number of residential consents issued increased by 13.4% during 2019, although the number of consents issued during the December 2019 quarter declined to 422, from a historic high of 503 in the preceding quarter.

The value of non-residential consents issued declined by 9.1% during 2019, compared to increases of 14.4% for the region and 5.2% for New Zealand respectively.

Average unemployment for the year to December 2019 was 4.7%, representing an improvement over the annual average unemployment rate of 5.1% recorded for the December 2018 year. The average number of Jobseeker Support recipients over the year to December 2019 increased by 8.3% over the previous year, somewhat below the increases of 9.7% for the region and 10.6% nationally. The average number of health enrolments increased by 4.8%, as compared to increases of 2.9% for the Waikato region and 2.3% for New Zealand.

Growth prospects for the first half of 2020 remain muted, with the COVID-19 virus outbreak expected to reduce demand for export products, while the city’s tourism sector is likely to suffer from the major downturn in tourist arrivals from China.

Overview of national economy

The economy looks to have turned a corner, at least temporarily, at the end of 2019. Although growth has slowed, some near-term indicators have shown an improvement. Traffic flows, tourism spending, and house prices have all shown renewed growth, and are set to provide a foundation for further growth in 2020. Government spending activity over the medium term also looks to support economic growth, but there remains little in the way of fundamental growth drivers over the next five years. With economic growth shifting down a gear in recent years, headline growth is likely to settle at a softer level. However, a significant risk to growth in 2020 is presented by the COVID-19 outbreak, which will restrain tourism and export activity, and could threaten consumer and business activity if the outbreak continues or spreads to New Zealand.