Timaru District Quarterly economic monitor - June 2020

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Overview

Indicator Timaru District Canterbury Region New Zealand
Annual average % change
Gross domestic product
0.6%
-2.3%
-2.1%
Traffic flow
-8.2%
-10.8%
-9.4%
Health Enrolments
1.3%
2.0%
2.5%
Consumer spending
-2.3%
-4.0%
-2.8%
Residential consents
-4.9%
16.4%
8.1%
Non-residential consents
-5.1%
-36.6%
-8.8%
House prices*
5.1%
3.9%
7.5%
House sales
-11.2%
-3.9%
-6.0%
Tourism expenditure
-10.5%
-12.1%
-12.3%
Car registrations
57.0%
-41.7%
-19.3%
Commercial vehicle registrations
-21.5%
-41.5%
-24.6%
Jobseeker Support recipients
24.9%
23.3%
19.0%
Level
Unemployment rate
3.3%
3.7%
4.1%
* Annual percentage change (latest quarter compared to a year earlier)

Overview of Timaru District

Timaru’s economy grew slightly over the past year, with Infometrics provisional GDP estimates showing growth of 0.6% in the year to June 2020, compared to a national decline of 2.1%. On a quarterly basis, Timaru’s GDP declined 9.0% from June 2019 to June 2020, compared to a 12.6% decline nationally. This relative strength reflects that the district’s primary sector and food manufacturers were able to continue operating throughout Level 4 lockdown, and that the district recorded moderate economic growth up to March 2020.

The number of Jobseeker Support recipients has risen across the country, up by 19.0% over the year to June 2020, with a stronger rise of 24.9% in Timaru. Infometrics COVID-19 Local Economic Insights Dashboard (LEI) shows that in the month of June 2020, there were 1,242 Jobseeker Support recipients and 59 COVID Income Relief Payment recipients in the district.

Consumer spending has been hit by the loss of international tourists and the lockdown, however spending in Timaru has held up slightly better than the rest of the country. Over the year to June 2020, Timaru’s spending was down by 2.3% compared to the national decline of 2.8%. Spending in the June quarter was down 17.5% compared to last year, however, Infometrics LEI shows that spending in Timaru recovered to pre-COVID levels in the month of June.

Building consents in Timaru are down on an annual basis, with the value of non-residential consents down 5.1% and the number of residential consents down 4.9% in the year to June 2020. Consents in Timaru were in decline pre-COVID. As a result of fewer houses being built and fewer being sold, house values have risen by 5.1% over the year to June 2020.

Car registrations remain elevated due to replacement of hail damaged vehicles; however, commercial vehicle registrations have dipped down over the year to June, reflecting a weaker outlook for businesses.

Food production and processing is a key strength of Timaru and will be an important pillar of the economy through the recession. Timaru’s dairy farmers will receive an additional $52 million this season due a higher dairy pay-out.

Overview of national economy

The New Zealand economy took a severe hit during the June 2020 quarter, as the COVID-19 pandemic saw the country locked down at home for around four weeks at Alert Level 4, before a rapid move down the Alert Levels to Level 1 in early June. The economy has endured a dramatic shift in focus, from life support at Level 4 to an adrenaline rush at Level 1. Yet the immediate economic ramifications are clear to see – economic activity has fallen, nearly 50,000 Kiwis lost their jobs, businesses struggled to cope with lower earnings, and incomes were reduced. The June quarter likely represents the largest single hit to the economy, but the economic scarring and restructuring will continue to occur over the coming years. New Zealand is not out of the woods yet.