Hamilton City Quarterly economic monitor - June 2020

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Overview

Indicator Hamilton City Waikato Region New Zealand
Annual average % change
Gross domestic product
-2.2%
-1.4%
-2.1%
Traffic flow
-7.0%
-11.3%
-9.4%
Health Enrolments
3.0%
2.4%
2.5%
Consumer spending
-4.5%
-1.9%
-2.8%
Residential consents
-1.6%
4.7%
8.1%
Non-residential consents
-14.8%
6.2%
-8.8%
House prices*
9.0%
8.2%
7.5%
House sales
-5.8%
-9.5%
-6.0%
Tourism expenditure
-7.4%
-9.2%
-12.3%
Car registrations
-10.1%
-10.9%
-19.3%
Commercial vehicle registrations
-20.8%
-22.3%
-24.6%
Jobseeker Support recipients
15.7%
17.7%
19.0%
Level
Unemployment rate
5.0%
3.9%
4.1%
* Annual percentage change (latest quarter compared to a year earlier)

Overview of Hamilton City

Hamilton City’s economy has been one of the worst hit by the COVID-19 pandemic, with provisional estimates from Infometrics showing a GDP decline of 14%pa in the June 2020 quarter, resulting in a 2.2% annual decline for the June 2020 year. The Hamilton economy faced a tougher blow than the wider Waikato Region, which contracted 1.4%pa in the June 2020 year, due to the large amount of primary industries in the wider region able to continue operating throughout Level 4 and Level 3 lockdown in April.

Marketview data shows consumer spending in Hamilton fell sharply in the June 2020 quarter, down 21% compared to June 2019, as households stayed outside the Hamilton urban centre for an extended period. This hit took annual spending down 4.5%pa, a bigger hit than the 2.8%pa nationwide contraction. However, the Infometrics Local Economic Insights Dashboard shows local monthly spending in Hamilton City returned to above pre-COVID levels in June. However, doubts remain for consumer spending in the coming quarters as Hamilton City returns to Level 2 lockdown, which will limit consumer spending as a large portion of the workforce works from home, and spending from nearby Auckland is limited.

Construction activity has softened, with non-residential building consents in Hamilton City down 15%pa, compared to an 8.8%pa contraction across New Zealand. Business investment and expansion is under considerably uncertainty and pressure, which will limit additional construction activity.

Job losses continue to mount, with a 16%pa rise in Jobseeker Support numbers. Overall, an additional 2,577 people in Hamilton were accessing a Jobseeker Support benefit or COVID-19 Income Relief Payment at the end of June, a 42% rise from June last year.

Overview of national economy

The New Zealand economy took a severe hit during the June 2020 quarter, as the COVID-19 pandemic saw the country locked down at home for around four weeks at Alert Level 4, before a rapid move down the Alert Levels to Level 1 in early June. The economy has endured a dramatic shift in focus, from life support at Level 4 to an adrenaline rush at Level 1. Yet the immediate economic ramifications are clear to see – economic activity has fallen, nearly 50,000 Kiwis lost their jobs, businesses struggled to cope with lower earnings, and incomes were reduced. The June quarter likely represents the largest single hit to the economy, but the economic scarring and restructuring will continue to occur over the coming years. New Zealand is not out of the woods yet.