Queenstown-Lakes District Quarterly economic monitor - September 2019

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Overview

Indicator Queenstown-Lakes District Otago Region New Zealand
Annual average % change
Gross domestic product
4.1%
2.8%
2.4%
Traffic flow
2.0%
1.4%
1.3%
Health Enrolments
6.1%
4.6%
2.0%
Consumer spending
4.8%
4.0%
3.4%
Residential consents
14.9%
10.7%
12.0%
Non-residential consents
54.5%
34.5%
12.7%
House prices*
1.2%
11.7%
1.9%
House sales
-2.3%
0.3%
-0.7%
Guest nights
1.3%
-0.09%
1.2%
Tourism expenditure
2.4%
2.2%
3.1%
Car registrations
-11.3%
-6.7%
-8.5%
Commercial vehicle registrations
-6.6%
-5.7%
-1.6%
Jobseeker Support recipients
23.1%
3.3%
10.3%
Level
Unemployment rate
1.1%
3.2%
4.2%
* Annual percentage change (latest quarter compared to a year earlier)

Overview of Queenstown-Lakes District

Queenstown-Lakes’ economy continues to grow strongly, with a strong construction sector and growing population outweighing softening growth in the tourism sector. Infometrics’ provisional GDP estimates show strong growth of 4.1%, ahead of New Zealand overall with 2.4%.

Guest nights at commercial accommodation providers grew at 1.3% in the year to September, in-line with the national trend, while visitor spending grew by a modest 2.4%, just below the national growth of 3.1%. Traffic volumes through the district continue to grow, but at a relatively modest rate of 2.0% per annum.

Building consents continue to rise strongly, signalling a solid workload for the construction sector for some time to come. Residential consents were up by 14.9% in the year to September 2019, and non-residential consents up by 54.5%, buoyed by consents for hotels and retail developments. However, the housing market is starting to moderate, with house values up by a modest 1.2% and sales down by 2.3%. The average house value was $1.2 million in the year to September 2019.

Population growth continues at a very high level, with Statistics New Zealand’s annual population estimates showing growth of 6.1% in the year to March 2018, easing to 3.7% in the year to March 2019 – still well above the national rate of 1.6%. Health enrolments for the year to September 2019 show growth of 6.1% - this may reflect a lag between residents arriving and registering with their local doctor.

Nationally, registrations of cars and commercial vehicles have fallen, with Queenstown-Lakes being no exception, in fact falling slightly faster than the national average. This may reflect that the tourism sector doesn’t expect further volume growth in this economic cycle.

Queenstown-Lakes’ unemployment rate remains extremely low at 0.9%, reflecting strong demand for workers, and shortage of affordable housing for those out of employment. Jobseeker Support recipients have jumped up by 23.1% over the past year, but remains at a relatively low level.

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.