Nelson-Tasman Quarterly economic monitor - June 2017

Overview

Indicator Nelson-Tasman New Zealand
Annual average % change
Gross domestic product
3.4%
2.8%
Traffic flow
11%
3.3%
Residential consents
14%
4.7%
Non-residential consents
51%
1.6%
House prices*
15%
5.1%
House sales
-11%
-14%
Guest nights
5.2%
3.7%
Retail trade
5.2%
3.4%
Car registrations
17%
9.5%
Commercial vehicle registrations
30%
20%
Jobseeker Support recipients
1.5%
1.2%
Tourism expenditure
9.2%
5.9%
Level
Unemployment rate
--
5.0%
International net migration
586
72,297
* Annual percentage change (latest quarter compared to a year earlier)

Overview of Nelson-Tasman

Infometrics’ provisional estimate of GDP showed Nelson-Tasman’s economy grew by 3.4% over the June 2017 year, compared to 2.8% growth nationally. Most indicators of spending and investment are expanding, with construction, vehicle sales, tourism and retail spending showing particularly strong growth.

Nelson Airport celebrated a milestone this winter – 1,000,000 passenger arrivals over a 12 month period. By comparison, there were just 865,000 passenger arrivals the previous year. Not surprisingly, the increase in passenger numbers has flowed through into a sharp lift in visitor spending and guest nights in Nelson-Tasman. Over the June 2017 year, visitor spending in the region totalled a record $657m, up from $602m a year ago.

Travel disruptions from the Kaikōura Earthquake have not hampered Nelson-Tasman’s visitor sector. Marlborough has seen more subdued visitor spending largely because of fewer Cantabrians driving the longer inland route to the Sounds, but Nelson-Tasman has fared better due to its better air connections and international visitors stopping off before heading inland or down the West Coast.

Although house price growth in Auckland continues to slow, prices in provincial settings and lifestyle destinations that were slower to get going in the first place, such as Nelson-Tasman, continue to climb rapidly. House prices in both Nelson and Tasman grew 14% over the June 2017 year. Demand is flowing into Nelson-Tasman where housing is more affordable than other lifestyle destinations, such as those in the Southern Lakes Region. Against this backdrop, there has been significant increases in new dwelling consents.

Nelson-Tasman primary sector outlook is bright. Healthy conditions are broad-based across horticulture, fruit, sheep and beef, seafood, forestry, and even dairy. Nelson-Tasman’s primary sector represents 12% of jobs in the region, compared to 6.5% nationally.

There was a slight uptick in the number of people receiving Jobseeker Support, but this trend is likely to be more indicative of mismatched skills or transitioning between employment, rather than indicative of an underlying lack of jobs around Nelson-Tasman. Data from ANZ supports this observation, with the data showing that number of jobs ads in the broader Nelson-Tasman-Marlborough region over the three months to June was up 38% from a year ago and this trend continued into July.

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.