Kapiti Coast District Quarterly economic monitor - June 2019

Overview

Indicator Kapiti Coast District Wellington Region New Zealand
Annual average % change
Gross domestic product
1.9%
2.1%
2.5%
Traffic flow
0.8%
1.9%
1.5%
Health Enrolments
1.1%
1.9%
1.8%
Consumer spending
4.9%
4.2%
4.0%
Residential consents
-5.4%
-4.5%
5.8%
Non-residential consents
-37.5%
22.1%
7.9%
House prices*
7.5%
8.5%
1.4%
House sales
0.6%
-1.6%
-0.9%
Guest nights
5.5%
3.0%
1.3%
Tourism expenditure
2.9%
6.8%
3.2%
Car registrations
-7.3%
-8.1%
-8.6%
Commercial vehicle registrations
6.5%
-2.4%
0.3%
Jobseeker Support recipients
8.0%
4.9%
9.6%
Level
Unemployment rate
3.4%
4.0%
4.1%
* Annual percentage change (latest quarter compared to a year earlier)

Overview of Kapiti Coast District

Kapiti’s economy is performing well, with steady GDP growth underpinned by confident households, as evidenced by growing house values and consumer spending. Infometrics provisional estimates show that the Kapiti Coast economy grew by 1.9% in the year to June 2019, tracking just under the national growth rate of 2.5%.

While consumer spending is often underpinned by population, consumer spending in Kapiti grew by a strong 4.9% over the year to June 2019 despite modest population growth of 1.1%, as measured by health enrolments.

The property market remains strong, with houses values up by 7.5% in the June 2019 quarter, compared to a year ago, and sale volumes holding steady. There remains potential for a further boost as new highway projects come to fruition and improve access into the capital. Residential consents in Kapiti have been soft, falling faster than the broader Wellington region since 2016. Non-residential consents are down strongly in the year to June 2019, however it’s not of particular concern as previous consenting peaks have been associated with development stages at Kapiti Landing.

Traffic volumes through the district have grown modestly, up 0.8% for the year, having fallen back from highs in 2017 and 2018. Vehicle registrations remain at elevated levels, with commercial vehicles growing strongly and cars easing slightly.

Kapiti has continued to grow its tourism market, with guest nights at commercial accommodation up 5.5% in the year to June and spending up 2.9%. Notably, guest nights grew much faster than the Wellington Region.

Unemployment in the district continues to decline, in-line with the broader Wellington Region trend. Kapiti’s unemployment rate of 3.4% in the year to June 2019 was a ten-year low. The number of Jobseeker Support recipients in the district has grown steadily, up by 8.0%. However, this is understood to be a consequence of a softer approach towards benefit recipients nationally, which has seen national Jobseeker Support recipients up by 9.6% at the same time as the unemployment rate has reached record lows.

Overview of national economy

The New Zealand economy continues to perform well, but concerns are growing about the future, with a long, slow, slowdown expected over the next few years. The Reserve Bank’s aggressive cut to the official cash rate (OCR) to 1.00% reflects a deteriorating economic outlook as both business and government investment remains poor, inflation remains low, and the employment outlook softens. With slowing population growth expected to eventuate before the end of the year, the focus turns to consumer spending and whether it can prop up economic growth, or if it too succumbs to global and domestic uncertainty.