Nelson-Tasman Quarterly economic monitor - March 2020

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Overview

Indicator Nelson-Tasman New Zealand
Annual average % change
Gross domestic product
2.3%
1.7%
Traffic flow
-1.6%
-0.2%
Health Enrolments
1.9%
2.5%
Consumer spending
3.8%
3.0%
Residential consents
2.3%
9.0%
Non-residential consents
-7.6%
-0.4%
House prices*
5.2%
5.9%
House sales
4.0%
2.0%
Tourism expenditure
-2.8%
1.4%
Car registrations
-8.3%
-11.5%
Commercial vehicle registrations
-12.6%
-12.8%
Jobseeker Support recipients
9.9%
11.7%
Level
Unemployment rate
3.5%
4.1%
* Annual percentage change (latest quarter compared to a year earlier)

Overview of Nelson-Tasman

Nelson-Tasman’s economic performance was solid in the year to March 2020, with GDP growth provisionally estimated at 2.3%, above the national growth rate of 1.7%. This provides the District with a relatively solid economic base heading into the impending COVID-19 recession.

Consumer spending increased by 3.8%, above the national increase of 3%, but tourism spend declined by 2.8%, in comparison to a 1.4% increase nationally.

The housing market remained strong, with house prices increasing by 5.2% compared to the March 2019 quarter, while the volume of housing sale transactions increased by 4% over the year to March 2020. Residential construction activity was similarly positive, with consents increasing by 2.3% in the year to March 2020. However non-residential consents declined by 7.6%, following several consecutive quarters of high activity levels.

Population growth continued, with health enrolments (a proxy for population growth) increasing by 1.9%. Despite this growth, the labour market remained relatively tight, with an unemployment rate in the year to March 2020 of 3.5%, somewhat below the national rate of 4.1%. The number of Jobseeker support recipients increased by 9.9% over the year, compared to an 11.7% increase nationally. This figure is forecast to increase sharply over the coming year.

Declines in both passenger and commercial vehicle registrations suggest increasing uncertainty in the Nelson-Tasman economy during the quarter.

The economy will deteriorate markedly over the coming year, with Infometrics forecasting GDP to fall by 8.0% and employment by 9.8% over the year to March 2021 nationally. House prices are forecast to decline by 11%. Nelson-Tasman is forecast to fare slightly better, due to its diversified economy, strong horticulture base and relatively low level of reliance on international tourism. The region’s GDP is projected to drop by 7.9% and employment by 9.5%. This will push unemployment up to 8.6%, a large increase but still below the national rate of 9.0%.

Overview of national economy

The COVID-19 pandemic has upended the economy and plunged New Zealand into the sharpest recession in living memory. The March quarter includes the full progression of the virus, from its origins in China and subsequent hit to New Zealand exports, through to border closures forcing lower tourism arrivals, before culminating in the lockdown of New Zealand under Alert Level 4. Our March 2020 Quarterly Economic Monitor only captures the initial economic effects of putting the New Zealand economy on life support. The June Monitor will better reflect activity changes. No sector of the economy will be spared, with the regional impacts dependant on the local economic structure – Infometrics is now forecasting the loss of 250,000 jobs nationally over the next year, followed by a long period of restructuring the economy.