Hamilton City Quarterly economic monitor - December 2018

Overview

Indicator Hamilton City Waikato Region New Zealand
Annual average % change
Gross domestic product
3.5%
2.8%
2.8%
Traffic flow
0.7%
2.0%
2.7%
Health Enrolments
2.5%
2.0%
1.9%
Consumer spending
3.8%
5.8%
4.5%
Residential consents
31%
6.7%
6.1%
Non-residential consents
8.4%
28%
9.0%
House prices*
0.3%
5.6%
2.6%
House sales
3.7%
4.5%
3.5%
Guest nights
0.1%
1.3%
2.3%
Tourism expenditure
5.0%
5.4%
4.3%
Car registrations
-1.2%
-2.7%
-6.7%
Commercial vehicle registrations
5.1%
3.7%
1.6%
Jobseeker Support recipients
6.6%
7.9%
4.8%
Level
Unemployment rate
4.7%
4.0%
4.3%
* Annual percentage change (latest quarter compared to a year earlier)

Overview of Hamilton City

Hamilton City continued its strong economic performance at the end of 2018, with GDP growing by 3.3%pa according to our provisional estimates. This strong growth was above both the 2.6%pa growth for the wider Waikato region, and the 2.7%pa New Zealand average. This growth was driven by a broad range of economic indicators.

The population in Hamilton continues to expand, with health enrolments – our new leading indicator for population growth – increasing by 2.5%pa over the 12 months to December 2018 in Hamilton. This growth in health enrolments is faster than both the wider Waikato region (up 2.0%pa) and the New Zealand average (up 1.9%pa). Population growth continues to boost consumer spending, which rose 3.8%pa in Hamilton over the period. However, the Waikato region is tied with Auckland for the lowest regional consumer confidence according to Westpac-McDermott Miller, with only 16% of the region expecting economic conditions to improve over the next year.

Transport indicators in Hamilton were a touch softer over the 12 months to December 2018. Although still growing, traffic volumes growth of 0.7%pa in Hamilton City were lower than the 2.0%pa for Waikato region and 2.7%pa New Zealand figure. Car registrations in Hamilton followed the national decline over the period, down 1.2%pa. However, commercial vehicle registrations grew strongly, up 5.1%pa.

Hamilton’s location within the Golden Triangle continues to fuel growth in building and housing activity. Residential consents increased 31%pa over the 12 months to December, growing at a significantly faster pace than the wider Waikato region (6.7%pa) and New Zealand (6.1%pa). Growth in non-residential consent values was also strong, with an 8.4%pa increase. House prices increased 2.4%pa, just above the national average of 2.3%pa. House sales increased 3.6%pa, again faster than the New Zealand average. However, growth in the number of houses for sale fell to single digit growth over the year to December 2018 according to realestate.co.nz data.

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.