Kapiti Coast District Quarterly economic monitor - March 2018

Overview

Indicator Kapiti Coast District Wellington Region New Zealand
Annual average % change
Gross domestic product
2.4%
2.7%
2.7%
Traffic flow
4.3%
4.2%
2.0%
Residential consents
2.6%
23%
2.5%
Non-residential consents
4.0%
-30%
2.6%
House prices*
14%
5.6%
9.5%
House sales
-3.2%
-9.8%
-15%
Guest nights
3.3%
2.0%
3.9%
Retail trade
4.4%
4.9%
4.5%
Car registrations
7.7%
2.6%
4.4%
Commercial vehicle registrations
-1.6%
23%
13%
Jobseeker Support recipients
-0.2%
-1.9%
-0.5%
Tourism expenditure
1.5%
6.4%
9.3%
Level
Unemployment rate
4.2%
4.5%
4.6%
International net migration
216
3,554
67,986
* Annual percentage change (latest quarter compared to a year earlier)

Overview of Kapiti Coast District

Kāpiti’s economy continued to grow at a moderate pace in the early stages of 2018. Infometrics’ provisional estimate of GDP shows growth of 2.4% over the March 2018 year, compared to the national average of 2.7%.

Most indicators of spending and investment in Kāpiti Coast District are growing at close to the national average. Traffic flows in Kāpiti are growing strongly as a result of population growth and higher levels of economic activity both in the district and particularly north into the Horowhenua.

Sustained strength in Kāpiti’s economy has led to further improvement in the labour market. The average number of people receiving Jobseeker Support eased 0.2% over the March 2018 year. Furthermore, Kāpiti’s unemployment rate continues to track down, even with a prolonged period of elevated population growth adding to the labour supply. Infometrics’ estimates show that Kāpiti’s unemployment rate averaged 4.2% across the March 2018 year – its lowest level since 2009.

Elevated population growth and improving job prospects have pushed up spending by households. Car registrations rose 7.7% over the March year, compared to growth of 4.4% nationally. Data from Marketview shows that electronic card spending on retail purchases climbed 4.4% over the same period.

Official data on visitor spending in Kāpiti has been relatively subdued over the past year. Data from MBIE shows that the annual running total of visitor spending peaked at $174m in December and slipped to $172m in the March year. The March year figure was up just 1.5% from a year ago, compared to 9.3% growth nationally. Commercial guest nights climbed 3.3% over the past year. By comparison, Infometrics estimates show that Airbnb guest nights during the summer months climbed 60% from a year ago. Airbnb guest nights over the past year were equivalent to approximately 20% of the number of commercial guest nights.

Overview of national economy

The prediction by Winston Peters of an economic correction or slowdown, made at the time of last October’s coalition announcement, appears to be coming true. Infometrics’ latest forecasts see New Zealand’s economic growth slowing to 2.4%pa by the end of this year and slipping below 2.0%pa during 2019. A range of factors have combined to drive the slowdown, many of which can be sheeted back to government policy. Weaker population growth will also mitigate some of the demand pressures in the Auckland housing market, but the region’s housing undersupply and affordability issues are likely to remain critical.