Thames-Coromandel District Quarterly economic monitor - September 2019

Overview

Indicator Thames-Coromandel District Waikato Region New Zealand
Annual average % change
Gross domestic product
1.4%
2.4%
2.4%
Traffic flow
2.6%
1.2%
1.3%
Health Enrolments
1.4%
2.9%
2.0%
Consumer spending
8.5%
4.1%
3.4%
Residential consents
2.6%
18.2%
12.0%
Non-residential consents
26.4%
15.7%
12.7%
House prices*
5.3%
4.1%
1.9%
House sales
0.8%
2.0%
-0.7%
Guest nights
6.4%
2.1%
1.2%
Tourism expenditure
9.7%
4.0%
3.1%
Car registrations
-13.4%
-6.3%
-8.5%
Commercial vehicle registrations
-5.9%
-0.9%
-1.6%
Jobseeker Support recipients
7.3%
10.8%
10.3%
Level
Unemployment rate
2.5%
3.7%
4.2%
* Annual percentage change (latest quarter compared to a year earlier)

Overview of Thames-Coromandel District

The Thames-Coromandel economy is slowing in line with national outcomes, with provisional Infometrics estimates show the local economy expanded by 1.4%pa over the September 2019 year. This softer growth is driven by lower household and business investment amid softer population growth, even as tourism activity in Thames-Coromandel remains strong.

Revised population figures for Thames-Coromandel saw 1,100 more people recorded in the area in 2018, compared to an earlier estimate. However, growth in Thames-Coromandel’s population appears to have slowed, with health enrolments in the area increasing by only 1.4%pa in the year to September 2019 – half the growth seen a year ago. The softer population growth has resulted in slower card spending growth, which still rose 8.5% according to Marketview data. Although this spending growth is slower than seen last quarter, Thames-Coromandel’s spending growth is still more than double the national average.

Slower population and spending growth haven’t yet seen a reversal in labour market fortunes in the area. Infometrics estimates show the unemployment rate in Thames-Coromandel sits at 2.5% – the eighth-lowest rate in New Zealand. Such a low unemployment rate demonstrates the tight labour market in the area. This tight labour market is reinforced by the fact that, even though Jobseeker Support recipients have also increased locally, the rise (7.3%pa) is lower than the national average growth (10%pa).

Meanwhile, tourism activity in Thames-Coromandel remains a key driver of economic activity. Over the September 2019 year, commercial guest nights rose 6.4%pa, putting the area in the upper third of local areas for guest nights growth. Given these figures don’t include private accommodation like Airbnb, accommodation growth in the area was likely even higher. Tourists visiting Thames-Coromandel are still happy to spend, with tourism spending rising 9.7%pa over the period. This spending growth was the sixth-highest tourism spending growth in the country in the September 2019 year.

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.