Kapiti Coast District Quarterly economic monitor - June 2017

Overview

Indicator Kapiti Coast District Wellington Region New Zealand
Annual average % change
Gross domestic product
4.9%
2.6%
2.8%
Traffic flow
3.6%
4.2%
3.3%
Residential consents
51%
20%
4.7%
Non-residential consents
181%
28%
1.6%
House prices*
18%
15%
6.7%
House sales
-15%
-8.4%
-14%
Guest nights
8.0%
2.0%
3.7%
Retail trade
4.0%
3.0%
3.6%
Car registrations
12%
10%
9.5%
Commercial vehicle registrations
39%
23%
20%
Jobseeker Support recipients
4.7%
0.01%
1.2%
Tourism expenditure
4.6%
2.3%
5.9%
Level
Unemployment rate
4.9%
5.0%
5.0%
International net migration
215
3,787
72,297
* Annual percentage change (latest quarter compared to a year earlier)

Overview of Kapiti Coast District

Kāpiti Coast District’s economy grew by 4.9% over the June year, according to Infometrics’ provisional estimate of GDP. Kāpiti’s expansion picked up a gear in the first half of 2017, with consent numbers and vehicle sales growing particularly strongly.

Kāpiti businesses are showing confidence in their outlook, as evident in rising levels of commercial vehicle purchases and non-residential building consents. Over the June year, commercial vehicle registrations climbed 39% to 397 – a record level. The value of non-residential building consents rose from $15m to $41m over the same period.

Labour market conditions in Kāpiti are mixed, with increases to the number of Jobseeker Support recipients indicating that there is a vulnerable group at the bottom, while other indicators show that demand for skilled labour is strong throughout the lower North Island. For example, a recent Wellington Chamber of Commerce survey reported that finding skilled staff was employers’ biggest impediment to growth at present.

The government’s recent pay deal to support low-income care workers will provide a significant cash injection to Kāpiti Coast District’s economy. Under the deal, a new care worker without a qualification will earn $19/hour, with experienced workers earning up to $23.50/hour. There are just under 1,500 care and social assistance jobs in Kāpiti Coast District, which represents around 10% of total jobs in the district.

Against a backdrop of strong population grow, retail spending growth in Kāpiti continues to grow above the national average. Data from Marketview shows that electronic card spending on retail purchases grew by 4.0% over the June year, compared to 3.6% growth nationally.

Demand for housing is also outstripping neighbouring Wellington City, with house prices in Kāpiti in June sitting 18% higher than a year ago, while prices in Wellington City climbed 14% over the same period. Building consent numbers are lifting in response to these price pressures. Nevertheless, a general shortage of construction workers will remain a key constraint to increasing the housing supply.

Overview of national economy

The ratio of New Zealand’s export prices relative to the cost of imports is close to historic highs, thanks to soaring demand for many of the country’s key export commodities and a butter boom. With service sector and construction activity also elevated, there remains significant momentum left in the New Zealand economy. But forecasts of interest rate increases have been pushed out as domestic inflation pressures aren't lifting as fast as had been anticipated and the high New Zealand dollar is subduing tradeables inflation.