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Thames-Coromandel District Quarterly economic monitor - September 2020

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Overview

Indicator Thames-Coromandel District Waikato Region New Zealand
Annual average % change
Gross domestic product
-1.9%
-2.1%
-3.3%
Traffic flow
-11.2%
-15.0%
-10.5%
Health Enrolments
2.0%
2.3%
2.3%
Consumer spending
4.3%
-0.6%
-2.7%
Residential consents
-12.0%
-2.8%
3.5%
Non-residential consents
-49.5%
4.5%
-7.6%
House prices*
15.1%
11.7%
8.0%
House sales
3.1%
-1.6%
1.1%
Tourism expenditure
-3.5%
-7.4%
-16.5%
Car registrations
-17.2%
-11.5%
-22.9%
Commercial vehicle registrations
-27.3%
-20.8%
-26.1%
Jobseeker Support recipients
41.7%
25.5%
27.3%
Level
Unemployment rate
3.2%
4.0%
4.4%
* Annual percentage change (latest quarter compared to a year earlier)

Overview of Thames-Coromandel District

The Thames-Coromandel economy has been hard hit by COVID-19 but saw a strong bounce in the September quarter. Provisional estimates from Infometrics show economic activity in the area rose 4.1%pa in the quarter, the 9th highest rise nationally. Domestic tourism activity has helped the rebound in the local economy, although the Auckland Level 3 restrictions took the shine off the rebound. This rebound limited the year-end economic activity downturn to -1.9%pa.

Thames-Coromandel has seen a strong surge in domestic tourism as Kiwis explore more of their own backyards with the borders closed. Overall tourism spending over the last 12 months is down 3.5%pa in the area. Domestic spending in the area rose at three times the national pace, with domestic tourism spending rising 33%pa over the September 2020 quarter, compared to 11%pa nationally.

However, the Auckland restrictions in August still restrained activity. Traffic flows declined 3.4%pa as traffic from the Super City remained low for a period.

The revival of domestic tourism activity has injected more confidence back into the local economy, with households getting out and supporting local. Marketview data shows a 21%pa increase in consumer spending in the September quarter, enough to reverse the decline in spending from lockdown. However, concerns over the loss of international tourism over the summer months will be important to monitor.

Other local industries have maintained economic momentum, with dairy sector activity holding up well due to a solid export performance. The current 2020/21 season is expected to deliver $56m into the local economy from the dairy pay-out.

Construction sector activity has fallen, with a 24%pa decline in residential dwelling consents in the district over the September quarter. Non-residential activity is also set to be lower, with a 54% fall in consent values over the same period.

Lower construction expectations highlight a wider decline in business investment activity, with commercial vehicle registrations down 17%pa. Job losses have also mounted, with around 500 additional Jobseeker Support recipients compared to a year earlier. This 64%pa rise is higher than the 43%pa national increase.

Overview of national economy

Economic activity rebounded strongly in the September 2020 quarter as the post-lockdown surge boosted spending levels and saw activity across various sectors attempt to make up for lost time. The pandemic still looms large over regional economies, and the pathway ahead is uncertain. But after a hammer blow to the economy in the first half of 2020, the economic rebound in the September quarter has set New Zealand on a more optimistic course ahead. Sustained export activity, combined with New Zealanders opening their wallets to domestic tourism, new cars, and home improvements, has buoyed confidence that the New Zealand economy will emerge from COVID-19 less battered than other parts of the world. The strength of the bounce back in economic activity is cause for celebration, but make no mistake, the pandemic has not finished yet.