Manawatu Quarterly economic monitor - September 2019

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Overview

Indicator Manawatu New Zealand
Annual average % change
Gross domestic product
2.2%
2.4%
Traffic flow
1.2%
1.3%
Health Enrolments
3.6%
2.0%
Consumer spending
4.0%
3.4%
Residential consents
9.3%
12.0%
Non-residential consents
-29.9%
12.7%
House prices*
13.9%
1.9%
House sales
0%
-0.7%
Guest nights
5.2%
1.2%
Tourism expenditure
2.0%
3.1%
Car registrations
-3.5%
-8.5%
Commercial vehicle registrations
16.9%
-1.6%
Jobseeker Support recipients
6.9%
10.3%
Level
Unemployment rate
5.2%
4.2%
* Annual percentage change (latest quarter compared to a year earlier)

Overview of Manawatu

The Manawatū regional economy remains solid with Infometrics’ provisional GDP estimate for the region growing 2.2% in the September 2019 year and electronic card spending on retail purchases increasing 4.0%. Consumers remain optimistic about the economy but are becoming increasingly cautious in their outlook. This caution can be seen in consumers’ reluctance to make major purchases with car registrations in the region down 3.5% in the September 2019 year.

Manawatū Region’s population has been growing slightly slower than previously estimated. Following the release of the 2018 census, StatsNZ has revised the district’s 2018 population to 118,400 from the previous estimate of 119,600. By June 2019, StatsNZ estimate that the district’s population had increased by 1.4% to reach 120,000.

Residential consents in Manawatū region grew 9.3% in the September 2019 year and remain at elevated levels. In contrast, non-residential consents fell 30% in the September 2019 year, following a particularly strong 2018, but remain 14% higher than their 10-year average.

House price inflation in Manawatū region rose to 14% in September 2019, well ahead of 1.9% growth nationally. National house price growth is being dragged down by falling prices in Auckland. House sales in the region remain at around 2,000 a year, which is 9% higher than the 10-year average.

Guest nights in Manawatū region rose 5.2% in the September 2019 year, well ahead of the 1.2% national average. Tourism spending in the region also looks to have plateaued, albeit at historically high levels, growing 2.0% in the September 2019 year. Nationally, spending by tourists grew 3.1% as domestic tourism and arrivals of tourists from across the Tasman offset a decline in tourist arrivals from China.

The region’s unemployment rate ticked upwards to 5.2% for the September 2019 year next to a national average of 4.2%. Jobseeker support recipients are also up, growing 6.9% in the region in the September 2019 year, compared with 10.3% growth nationally.

Overview of national economy

Warning signs continue to appear for the direction of the New Zealand economy over the next few years, even as current activity remains solid. There is a growing divide between current activity and the outlook for the future, with global and domestic uncertainty at odds with current demand-led growth. There are both upside and downside risks to the future direction of travel, although on balance a deteriorating economic outlook is more likely. An expected pick-up in the housing market over 2020 has the potential to draw the economy out of the doldrums, but continued slower global economic growth, low domestic investment, and slowing spending growth could tip the economy in the other direction.