Timaru District Quarterly economic monitor - December 2019

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Overview

Indicator Timaru District Canterbury Region New Zealand
Annual average % change
Gross domestic product
2.4%
1.2%
2.3%
Traffic flow
0.2%
-1.0%
1.7%
Health Enrolments
0.9%
1.7%
2.3%
Consumer spending
1.7%
2.0%
3.3%
Residential consents
-8.0%
11.3%
13.8%
Non-residential consents
-14.5%
-14.6%
5.2%
House prices*
5.5%
0.8%
3.6%
House sales
0.8%
3.3%
-1.0%
Tourism expenditure
2.9%
1.3%
3.5%
Car registrations
18.4%
-22.7%
-8.6%
Commercial vehicle registrations
-6.5%
-16.0%
-6.9%
Jobseeker Support recipients
15.2%
14.5%
10.6%
Level
Unemployment rate
3.2%
3.7%
4.1%
* Annual percentage change (latest quarter compared to a year earlier)

Overview of Timaru District

Timaru’s economy grew by a solid 2.5% in the year to December 2019, just ahead of the national rate of 2.3%, according to Infometrics provisional GDP estimates. Traffic volumes through the district have grown by a modest 0.2% in the year to December 2019, ahead of a 1% decline across the Canterbury region. Commercial vehicle registrations did decline, by 6.5%, but this was in line with the national trend and registrations remain elevated compared to the districts’ long-term average.

Average house values in Timaru continue to grow steadily, up 5.5% to reach $373,082 in the year to December 2019. The number of houses sold notched up by 0.8% and is sitting in line with the long-term average. Despite growing interest in the housing market, residential building consents have continued to slide since 2017, down by 8% over the past year. The value of non-residential consents eased too, down by 14.6%, indicating that the construction sector may start to face light workloads as previously consented works approach completion.

Household confidence in the district appears to be weakly positive, with consumer spending growing by 1.7% in the year to December 2019, just over half of the national rate of 3.3%. There was a large boost to car registrations in the December quarter, but this is likely to be a function of insurance write-offs following the November hailstorm, rather than underlying confidence of households, as registrations have been easing for some time prior.

The 2019 Regional Economic Profile showed steady employment growth of 1.0% in the year to March 2019, driven by growth in transport and logistics, and administrative services industries. Timaru’s unemployment rate remains relatively low at 3.2%, below the national average of 4.1%. Despite this, the number of Jobseeker Support recipients grew at 15.2% in the year to December 2019, ahead of the national average – this may indicate a growing group of residents who are struggling to engage with the labour market.

Visitor spending in the district continues to grow steadily, up 2.9% in the year to December 2019, broadly in line with the national trend. The 2019 Regional Economic Profile shows that the tourism sector accounts for 6.3% of employment in the district.

Continued increases in the dairy pay-out means that Timaru farmrs are expected to earn $401m across the 2019/20 season, up $51m on last season.

Overview of national economy

The economy looks to have turned a corner, at least temporarily, at the end of 2019. Although growth has slowed, some near-term indicators have shown an improvement. Traffic flows, tourism spending, and house prices have all shown renewed growth, and are set to provide a foundation for further growth in 2020. Government spending activity over the medium term also looks to support economic growth, but there remains little in the way of fundamental growth drivers over the next five years. With economic growth shifting down a gear in recent years, headline growth is likely to settle at a softer level. However, a significant risk to growth in 2020 is presented by the COVID-19 outbreak, which will restrain tourism and export activity, and could threaten consumer and business activity if the outbreak continues or spreads to New Zealand.