Kapiti Coast District Quarterly economic monitor - September 2018

Overview

Indicator Kapiti Coast District Wellington Region New Zealand
Annual average % change
Gross domestic product
2.5%
2.6%
2.9%
Traffic flow
3.6%
4.4%
3.9%
Residential consents
-21%
13%
5.4%
Non-residential consents
-22%
-23%
4.9%
House prices*
7.8%
12%
8.4%
House sales
1.8%
-2.2%
-0.6%
Guest nights
2.1%
2.1%
2.7%
Retail trade
4.8%
4.7%
4.8%
Car registrations
-2.4%
0.8%
-1.7%
Commercial vehicle registrations
-6.5%
8.3%
2.3%
Jobseeker Support recipients
-1.0%
2.7%
2.2%
Tourism expenditure
0.9%
7.0%
8.2%
Level
Unemployment rate
4.0%
4.4%
4.3%
International net migration
242
3,269
62,735
* Annual percentage change (latest quarter compared to a year earlier)

Overview of Kapiti Coast District

The Kapiti Coast District economy is looking stronger in some respects this quarter but continued falls in residential and non-residential building consents is a concern for the construction sector going into 2019. Infometrics’ provisional GDP growth estimate rose to 2.5% in the September 2018 year, almost matching 2.6% growth across the Wellington region and only a little off the 2.9% national average. However, the district’s economic growth is well off the 4-5%pa growth rates seen in 2016.

Residential consents in the district fell 21% in the September 2018 year. This year has seen some healthy quarterly results, but they have been able to match a particularly strong 2017. Similarly, non-residential consents were down 22% in the September 2018 year after a strong showing last year. This weakness in the construction sector is flowing through to falls in commercial vehicle registrations, down 6.5% in contrast to 8.3% growth across the Wellington region and 2.3% growth nationally.

Traffic flows, a good indicator of economic activity, and retail trade both remain strong. Electronic card spending on retail purchases grew 4.8% in the September year, matching the national average. However, car registrations in the district were down 2.4%. Tourism spending in the district edged up 0.9% in the September year, despite a 7.0% rise across the Wellington. There’s better news from guest nights, which rose 2.1% to an unprecedented 182,500.

After a relatively subdued 2017, house sales have picked up a little this year. House sales in the district rose 1.8% in the September 2018 year, bucking declines across the region and nationally. House price inflation continues to moderate, with prices growing 7.8% in the September 2018 year, well below the 25% growth seen in 2016.

At 4.0%, the district’s average unemployment rate for the September 2018 year remains below the regional and national averages. The average number of Jobseeker Support recipients also fell again, declining 1.0% next to increases across the region and nationally.

Overview of national economy

We’ve revised up our forecasts of economic growth. It’s not a big change – our growth projection for the year to June 2019 has lifted from 2.7% to 2.9%. But it’s an upward revision and so is at odds with the air of despair being generated by negative business and consumer confidence surveys. Better economic growth in the near term is largely about government spending. Aside from government spending, the other major upward revision is the export outlook. Export prices are at their highest level since 2014 in NZ dollar terms.