Tararua District Quarterly economic monitor - June 2020

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Overview

Indicator Tararua District Manawatu-Wanganui Region New Zealand
Annual average % change
Gross domestic product
0.9%
-0.9%
-2.1%
Traffic flow
-8.8%
-8.6%
-9.4%
Health Enrolments
0.8%
1.9%
2.5%
Consumer spending
2.5%
-0.9%
-2.8%
Residential consents
100%
10.6%
8.1%
Non-residential consents
67.1%
36.3%
-8.8%
House prices*
13.7%
16.4%
7.5%
House sales
-10.7%
-12.8%
-6.0%
Tourism expenditure
-7.9%
-10.5%
-12.3%
Car registrations
-15.4%
-14.9%
-19.3%
Commercial vehicle registrations
-33.7%
-22.4%
-24.6%
Jobseeker Support recipients
14.9%
10.6%
19.0%
Level
Unemployment rate
4.1%
4.6%
4.1%
* Annual percentage change (latest quarter compared to a year earlier)

Overview of Tararua District

The Tararua District economy contracted 4.2%pa in the June 2020 quarter. However, with strong growth in previous quarters, the provisional Infometrics GDP estimate for the district edged up 0.9% in the June 2020 year. This slight rise was in contrast to a 2.1% fall in GDP in the June 2020 year nationally but reflects a reasonably strong Manawatu-Wanganui regional economy which contracted by just 0.9% in the June 2020 year.

The district is benefitting from continued strength in New Zealand’s food exports with meat and dairy export volumes both up on last year, largely on the back of sustained demand from China. The ANZ Commodity Price Index shows that dairy prices are holding up well. Infometrics estimates the district’s 2019/20 dairy pay-out to be $245m, which is $32m higher than 2018/19. Meat export prices have eased a little but remain at elevated levels. Meat prices are being sustained by a global shortage of protein resulting from the continued effects of African Swine Fever and the temporary closure of meat processing plants in several overseas countries due to COVID-19 outbreaks.

Electronic card spending on retail purchases in the district fell 5.6%pa in the June 2020 quarter according to Marketview data. However, this fall was not enough to offset spending increases in previous quarters, with annual spending up 2.5% in the June 2020 year.

House sales in the district fell 11% reflecting a softer housing market across the Manawatu-Wanganui region as a whole. Fewer properties coming onto the market has sustained house price inflation with prices in the district up 14%pa in the June 2020 quarter.

One area of concern is a 15% jump in the number of Jobseeker Support recipients in the district in the June 2020 year. Recipient numbers have been on an upward trajectory since 2018, but the recent jump takes the district’s annual average number to 729, which is the highest since our series begin in 2010.

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.