Timaru District Quarterly economic monitor - September 2019

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Overview

Indicator Timaru District Canterbury Region New Zealand
Annual average % change
Gross domestic product
2.0%
1.9%
2.4%
Traffic flow
0%
-0.8%
1.3%
Health Enrolments
0.9%
1.7%
2.0%
Consumer spending
1.0%
1.9%
3.4%
Residential consents
-7.3%
12.2%
12.0%
Non-residential consents
10.8%
23.1%
12.7%
House prices*
4.0%
2.2%
1.9%
House sales
5.9%
3.3%
-0.7%
Guest nights
-4.4%
1.3%
1.2%
Tourism expenditure
4.6%
3.0%
3.1%
Car registrations
-10.2%
-11.1%
-8.5%
Commercial vehicle registrations
-3.2%
-5.1%
-1.6%
Jobseeker Support recipients
14.6%
15.4%
10.3%
Level
Unemployment rate
3.2%
3.7%
4.2%
* Annual percentage change (latest quarter compared to a year earlier)

Overview of Timaru District

Timaru’s economy has grown steadily in the year to September 2019, with Infometrics’ provisional estimates showing solid GDP growth of 2.0%, consistent with the Canterbury region overall, and just behind the national average of 2.4%.

The housing market in Timaru has outperformed the rest of the country, with values up by 4.0% and sales up by 5.9%. The average house is worth $367,800, compared to $692,400 nationally – a real strength in attracting workers to the district. Despite the heated housing market, residential building consents eased by 7.3% in the year to September 2019. On the non-residential front, consents were up by a solid 10.8%.

Upward revisions in dairy payouts point to an expected payout $7.05 per kg of milk solids in the 2019/20 season, leading to an increased payout to Timaru farmers of $38m compared to last season. With uncertainty in the farming community around carbon and freshwater regulations, we expect much of the extra payout to go towards debt, rather than flowing through to on-farm investment and rural suppliers.

Registrations of cars and commercial vehicles have eased in line with a national trend, so doesn’t reflect a weakening of confidence in the district. Traffic volumes in Timaru, much like the rest of Canterbury, were flat. Consumer spending has grown in the district, by a modest 1.0%. Spending by visitors grew by a solid 4.6%, despite commercial guest nights falling by 4.4%.

Statistics New Zealand’s annual population estimates show modest population growth in Timaru of 0.4% in the year to March 2019. This contrasts with national growth of 1.6% in the same period. With an ageing population, Timaru is wholly reliant on net migration to grow their population.

Due to a tight labour market, unemployment in the district remains at a very low 3.2%, having sat at or just over 3% for over five years. Jobseeker support recipients have ticked up by 14.6% over the past year, but this is predominantly a national trend due to policy changes around benefit sanctions and eligibility.

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.