Thames-Coromandel District Quarterly economic monitor - June 2019

Overview

Indicator Thames-Coromandel District Waikato Region New Zealand
Annual average % change
Gross domestic product
2.1%
2.7%
2.5%
Traffic flow
3.5%
1.5%
1.5%
Health Enrolments
1.8%
3.0%
1.8%
Consumer spending
9.1%
5.2%
4.0%
Residential consents
-11.1%
15.0%
5.8%
Non-residential consents
92.5%
17.6%
7.9%
House prices*
1.4%
3.1%
1.4%
House sales
1.3%
4.4%
-0.9%
Guest nights
6.8%
2.8%
1.3%
Tourism expenditure
10.9%
5.5%
3.2%
Car registrations
-10.9%
-5.9%
-8.6%
Commercial vehicle registrations
-7.4%
0.3%
0.3%
Jobseeker Support recipients
5.4%
11.2%
9.6%
Level
Unemployment rate
3.1%
3.6%
4.1%
* Annual percentage change (latest quarter compared to a year earlier)

Overview of Thames-Coromandel District

Provisional estimates from Infometrics show that the Thames-Coromandel economy expanded 2.1% over the 12 months to June 2019, off the back of sustained population growth, confident households, and heightened tourism activity.

The outlook remains positive for the economy, with traffic volumes rising 3.5%pa over the period, the 10th equal fastest growing area for traffic volumes in New Zealand. Increased traffic flows are a leading indicator of economic output, with more activity on the roads indicating more economic activity throughout Thames-Coromandel.

More activity is being driven by a growing population, with health enrolments (our proxy for local population growth) increasing 1.8%pa, at the same pace as the national average. More people in the area, combined with continued household confidence, has resulted in 9.1%pa growth in consumer spending according to data from Marketview.

A strong labour market means than the growing population is still able to find jobs, with unemployment remaining a full percentage point below the national average. Although the unemployment rate in the area has increased marginally over recent quarters, Jobseeker Support recipients in Thames-Coromandel are growing at a slower pace than the national average, up 5.4%pa compared with 9.6% nationally as the government makes it easier to access income support.

Tourism activity continues to add to the Thames-Coromandel economy. Guest nights in the area rose 6.8% over the 12 months to June 2019, ahead of the 1.3% growth nationally. Guest nights only reflect commercial accommodation, so are likely to underrepresent trends in tourist accommodation due to the likely larger size of the private accommodation market in Thames-Coromandel. Visitors to Thames-Coromandel are also increasing their spending, with the 10.9% increase in tourist spending driven by strong growth in spending by domestic travellers.

Overview of national economy

The New Zealand economy continues to perform well, but concerns are growing about the future, with a long, slow, slowdown expected over the next few years. The Reserve Bank’s aggressive cut to the official cash rate (OCR) to 1.00% reflects a deteriorating economic outlook as both business and government investment remains poor, inflation remains low, and the employment outlook softens. With slowing population growth expected to eventuate before the end of the year, the focus turns to consumer spending and whether it can prop up economic growth, or if it too succumbs to global and domestic uncertainty.