Horowhenua District Quarterly economic monitor - September 2019

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Overview

Indicator Horowhenua District Manawatu-Wanganui Region New Zealand
Annual average % change
Gross domestic product
2.8%
2.4%
2.4%
Traffic flow
1.4%
0.7%
1.3%
Health Enrolments
2.7%
3.1%
2.0%
Consumer spending
6.2%
5.2%
3.4%
Residential consents
12.0%
12.1%
12.0%
Non-residential consents
40.3%
-15.1%
12.7%
House prices*
19.9%
15.4%
1.9%
House sales
-5.1%
-4.0%
-0.7%
Guest nights
20.9%
3.3%
1.2%
Tourism expenditure
-0.6%
0.6%
3.1%
Car registrations
-5.2%
-2.7%
-8.5%
Commercial vehicle registrations
-7.1%
5.8%
-1.6%
Jobseeker Support recipients
4.6%
6.0%
10.3%
Level
Unemployment rate
6.7%
5.6%
4.2%
* Annual percentage change (latest quarter compared to a year earlier)

Overview of Horowhenua District

The Horowhenua economy is still in good shape and growing ahead of the national economy. Infometrics’ provisional estimates show that the local economy expanded by 2.8% in the 12 months to September 2019. Two other key indicators of broad economic activity support our view that the local economy is still healthy. Traffic flows grew by 1.4%, slightly higher than national growth, and consumer spending grew by a robust 6.2%, nearly double the national average.

Horowhenua’s population has been growing faster than previously estimated. Following the release of the 2018 Census StatsNZ has revised Horowhenua’s 2018 population to 34,300, up from the previous estimate of 33,000. In the year to June 2019 the district’s population has increased a further 2.0% to reach 35,000. Horowhenua’s population growth has now exceeded national growth for four successive years. Growth in health enrolments of 2.7% in the year to September 2019 indicate that the population is continuing to grow rapidly.

Strong population growth is boosting the demand for housing and the average house value increased by nearly 20% in the year to September 2019. This was the fourth fastest growth among 66 territorial authorities.

Residential construction has responded to the strong demand for housing. Nearly 290 residential consents were issued in the 12 months to September which is more than double the 10-year average of 135. Non-residential construction is also booming, with consents to the value of nearly $16m being issued in the 12 months to September, about 50% higher than the 10-year average.

Horowhenua’s labour market is benefitting from an expanding economy and is in better shape than we previously thought. Infometrics has revised Horowhenua’s unemployment rate downwards following the release of the 2018 Census. We estimate the unemployment rate to be 6.7% in the year to September 2019. There has been an uptick in Jobseeker Support recipients but the growth in Horowhenua (4.6%) is well below the national rate (10.3%).

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.