Thames-Coromandel District Quarterly economic monitor - June 2020

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Overview

Indicator Thames-Coromandel District Waikato Region New Zealand
Annual average % change
Gross domestic product
-2.4%
-1.4%
-2.1%
Traffic flow
-10.2%
-11.3%
-9.4%
Health Enrolments
1.8%
2.4%
2.5%
Consumer spending
1.4%
-1.9%
-2.8%
Residential consents
-1.7%
4.7%
8.1%
Non-residential consents
-39.7%
6.2%
-8.8%
House prices*
8.1%
8.2%
7.5%
House sales
-8.1%
-9.5%
-6.0%
Tourism expenditure
-6.4%
-9.2%
-12.3%
Car registrations
-15.9%
-10.9%
-19.3%
Commercial vehicle registrations
-22.3%
-22.3%
-24.6%
Jobseeker Support recipients
27.5%
17.7%
19.0%
Level
Unemployment rate
2.9%
3.9%
4.1%
* Annual percentage change (latest quarter compared to a year earlier)

Overview of Thames-Coromandel District

The Thames-Coromandel economy has taken one of the hardest hits from the COVID-19 pandemic and New Zealand’s lockdown. Provisional estimates from Infometrics show that economic activity fell 2.4%pa over the year to June 2020, as tourism activity plunged – the 6th largest fall in economic activity across New Zealand.

Traffic volumes across Thames-Coromandel fell just over 10%pa over the 12 months to June 2020, as people movements and freight volumes fell during the Alert Level restrictions.

Fewer visitors, and a period of no travel movements, were compounded by the importance of tourism to the local economy. With the tourism sector employing 25% of the District’s workforce, the drop in tourism activity was a hard knock to the district. Over the June 2020 year, visitor spending was down 6.4%pa, with a $26m fall in expenditure recorded.

The decline in tourism activity has seen business investment reduce, with non-residential consents falling just shy of 40%pa after two strong years of activity, as additional business capacity was reassessed. Commercial vehicle registrations also fell, down 22%, as businesses limited new spending.

Falling economic activity has hit the labour market, with a sharp jump in the number of Jobseeker Support recipients by the end of June 2020. Once the COVID-19 Income Relief Payment is included, government jobless support claims rose 73%pa in June, with 513 additional people claiming support compared to June 2019.

However, there are still pockets of strength in the Thames-Coromandel economy. Although Marketview data shows that local spending in the June quarter was down nearly 15%pa, this fall was just a touch worse than the national average, and the strength of spending in recent times provided businesses with a better starting position as New Zealand entered the pandemic.

Export outcomes are mixed for Thames-Coromandel. The dairy pay-out for the season just ended should bring in an additional $8m compared to the previous season but sustained lower seafood exports will limit any export upsides for the District.

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.