Kapiti Coast District Quarterly economic monitor - December 2018

Overview

Indicator Kapiti Coast District Wellington Region New Zealand
Annual average % change
Gross domestic product
1.7%
2.3%
2.7%
Traffic flow
1.3%
3.1%
2.7%
Health Enrolments
1.2%
1.6%
1.9%
Consumer spending
4.4%
4.2%
4.5%
Residential consents
-5.9%
19%
6.1%
Non-residential consents
-58%
-13%
9.0%
House prices*
4.3%
9.8%
2.3%
House sales
9.1%
-1.7%
3.1%
Guest nights
3.6%
1.9%
2.3%
Tourism expenditure
-0.6%
4.6%
4.3%
Car registrations
-7.4%
-4.4%
-6.7%
Commercial vehicle registrations
0.5%
8.8%
1.6%
Jobseeker Support recipients
0.7%
4.4%
4.8%
Level
Unemployment rate
4.1%
4.6%
4.3%
* Annual percentage change (latest quarter compared to a year earlier)

Overview of Kapiti Coast District

The Kapiti Coast district economy capped off a subdued 2018 with Infometrics’ provisionally estimating GDP growth of 1.7% in the December 2018 year, compared with 2.7% nationally and 2.3% across the Wellington region.

There are some notable bright spots, such as consumer spending. Electronic card spending on retail purchases grew 4.4% in the December 2018 year, close to both the national average of 4.5% and the regional average of 4.2%, but well up on the 3% growth rates that the district saw in 2016 and 2017.

Car registrations in the district fell 7.4% in the December 2018 year and commercial vehicle registrations rose just 0.5%. However, both series are at high levels, albeit down from their 2017 peaks.

The local tourism sector also remained strong in 2018. Tourists spent an unprecedented 185,068 nights in the region in 2018. Although tourism spending in the district fell slightly (0.6%) in the December 2018 year, the longer-term trend in tourist spending is firmly upward.

House prices in the district rose 4.3% in the December 2018 year, matching the national average of 4.3%. Residential consents in the district are holding up at moderate levels, despite falling 5.9% in the December 2018 year. Non-residential consents are a bigger concern. They weakened considerably in the district throughout 2018, falling 58% in the December 2018 year.

We have recently begun using enrolments at primary health providers as a timely proxy for population growth. The data suggests population growth of 1.2% in the December 2018 year.

At 4.1% in the December 2018 year, the district’s unemployment rate remained below the national average of 4.3% and the regional average of 4.4%.

Overview of national economy

Throughout 2018, business confidence indicators suggested the New Zealand economy was going to crash and burn. But although growth slowed slightly, there were no other signs we were staring down the barrel of a full- blown recession. Looking to 2019, New Zealand’s domestic economy remains in a similar position to 12 months ago: prospects of middling growth, somewhat hampered by capacity constraints and a tight labour market, and with some of the biggest potential shifts being driven by government policies (such as migration or the housing market). In contrast to this largely unchanged domestic picture, many question marks have appeared during the last year over the international economic environment.