Hamilton City Quarterly economic monitor - September 2019

Overview

Indicator Hamilton City Waikato Region New Zealand
Annual average % change
Gross domestic product
2.5%
2.4%
2.4%
Traffic flow
-0.7%
1.2%
1.3%
Health Enrolments
4.9%
2.9%
2.0%
Consumer spending
1.2%
4.1%
3.4%
Residential consents
30.4%
18.2%
12.0%
Non-residential consents
0.3%
15.7%
12.7%
House prices*
0.8%
4.1%
1.9%
House sales
3.1%
2.0%
-0.7%
Guest nights
5.7%
2.1%
1.2%
Tourism expenditure
-1.6%
4.0%
3.1%
Car registrations
-5.6%
-6.3%
-8.5%
Commercial vehicle registrations
-3.1%
-0.9%
-1.6%
Jobseeker Support recipients
8.7%
10.8%
10.3%
Level
Unemployment rate
4.7%
3.7%
4.2%
* Annual percentage change (latest quarter compared to a year earlier)

Overview of Hamilton City

Provisional estimates from Infometrics show economic activity in Hamilton rose 2.5%pa over the September 2019 year, supported by a growing population and increased investment in construction activities, healthy household spending, and tourism activity.

Recently released population data from StatsNZ has revised down the number of people estimated to live in Hamilton City, with 3,400 less people in Hamilton in 2018 than previously thought. However, the strength in population growth since June 2018 has seen this downwards revision clawed back, with 3,600 more people in Hamilton over the year to June 2019 according to provisional estimates – the 4th largest population gain among all territorial authorities over the last year. Health enrolments growth confirms this trend, with enrolments growth the 4th highest in New Zealand.

The larger population and economic success of the wider Waikato region is translating into more construction work. Residential consents in Hamilton have risen by 30% over the September 2019 year as the population grows, with consented dwellings in the September quarter being double the 10-year average. Non-residential consents only grew marginally over the last year, but this lack of growth is due to two strong years of sustained construction activity. Non-residential consent values over the year to September 2019 are around 32% higher than the 10-year average, with more activity expected from recently announced projects, including a new metal health facility, works at Waikato University, a recently-funded theatre project, and industrial activity in Ruakura.

Even with a swathe of construction projects in the pipeline and more people in Hamilton, house price growth remains subdued. Prices rose 0.8%pa over the year, the first increase in half a year. Softer house prices have restrained household spending, with Marketview data showing card spending rising by only 1.2%pa over the September year. With car registrations also falling 5.6%pa over the period, households appear to be more cautious about the future.

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.