Nelson-Tasman Quarterly economic monitor - September 2017

Overview

Indicator Nelson-Tasman New Zealand
Annual average % change
Gross domestic product
3.0%
2.5%
Traffic flow
12%
2.3%
Residential consents
19%
3.0%
Non-residential consents
47%
5.9%
House prices*
14%
3.1%
House sales
-14%
-17%
Guest nights
4.4%
2.6%
Retail trade
4.9%
3.8%
Car registrations
15%
9.4%
Commercial vehicle registrations
25%
19%
Jobseeker Support recipients
2.6%
0.6%
Tourism expenditure
7.0%
6.4%
Level
Unemployment rate
3.2%
4.9%
International net migration
640
70,983
* Annual percentage change (latest quarter compared to a year earlier)

Overview of Nelson-Tasman

Nelson-Tasman’s economy expanded by 3.0% over the September 2017 year, according to Infometrics’ provisional estimate of GDP. This growth was above national growth of 2.5%. Economic activity was strong in both Nelson City (up 2.5%) and Tasman District (up 3.7%).

Most indicators of spending and investment are expanding, with more rapid population growth also adding to demand. Traffic flows through the region have risen rapidly because of this increased activity, as well as disruptions stemming from the redirection of SH1 traffic through the central South Island. Vehicle movements in Nelson-Tasman rose 12% over the September year.

Recently released population estimates from Statistics New Zealand showed Nelson City’s population increased by 1.6% in the June year, while Tasman District’s population expanded by 1.8%. By comparison, population growth has averaged 1.4%pa and 1.0%pa respectively in these two areas over the past 10 years.

An expanding population has added significantly to household spending and investment in Nelson-Tasman. Retail spending in Nelson-Tasman climbed 4.9% over the September year, while car registrations increased by 15%. Residential building consent number have risen 33% over the past year.

Business spending and investment remain buoyant. Commercial vehicle sales increased 25% over the past year, while the value of non-residential building consents climbed 47%. Job ads data has also shown sharp increases to the number of positions being advertised in the upper South Island. Nevertheless, there are still some workers in more vulnerable positions, with the number of people seeking Jobseeker Support rising slightly.

The outlook for Nelson-Tasman’s primary sector is good. Global prices for horticulture products rose 2.6% in September month, largely driven by a rebound in Kiwifruit prices. Apples prices also lifted as poor weather in Europe limited late season supply. Forestry prices are still going strong, climbing 0.5% in September – their 12th month of consecutive rises. Recent falls in the value of the NZ dollar against major currencies will further increase domestic returns for exporters.

Overview of national economy

The New Zealand economy had a healthy September quarter. A rosy economic growth outlook, and signs that inflation is set to increase, raise the prospect of mortgage rates beginning to creep up later next year. More expansionary fiscal policy under the Labour government is a key driver of the solid GDP outlook. But capacity constraints in the residential construction sector remain a key risk.