Northland Region Quarterly economic monitor - December 2018

Overview

Indicator Northland Region New Zealand
Annual average % change
Gross domestic product
2.2%
2.7%
Traffic flow
2.7%
2.7%
Health Enrolments
2.7%
1.9%
Consumer spending
6.4%
4.5%
Residential consents
-6.8%
6.1%
Non-residential consents
53%
9.0%
House prices*
6.2%
2.3%
House sales
0.4%
3.1%
Guest nights
0.7%
2.3%
Tourism expenditure
-0.3%
4.3%
Car registrations
-6.4%
-6.7%
Commercial vehicle registrations
-1.4%
1.6%
Jobseeker Support recipients
2.6%
4.8%
Level
Unemployment rate
5.6%
4.3%
* Annual percentage change (latest quarter compared to a year earlier)

Overview of Northland Region

The Northland economy grew by 2.2%pa over the 12 months to December 2018, according to our provisional estimates. This growth is slightly slower than the New Zealand average of 2.7%pa and follows a softer growth outlook for the New Zealand economy.

Consumer confidence in Northland rose at the end of 2018, with a net 24% of Northlanders feeling positive about economic conditions over the next year according to Westpac-McDermott Miller. Consumer spending backs up this finding, with growth in consumer spending in Northland of 6.4%pa over the 12 months to December, above the New Zealand average of 4.5%pa. Health enrolments, our new leading indicator for population growth, grew 2.7%pa in Northland over the same period, matching national growth.

The labour market in Northland remains tight, with unemployment over the 12 months to December 2018 remaining at 5.6%pa, the lowest since mid-2008. Although Jobseeker numbers in Northland also rose over this period (up 2.6%pa), the New Zealand wide increase in Jobseeker numbers was considerably higher at 4.8%pa.

Traffic flows in Northland over the 12 months to December 2018 were up 2.7%pa, in line with New Zealand-wide growth. However, vehicle registrations fell in Northland over the past year. Passenger car registrations fell 6.4%pa over the 12 months to December 2018, a slightly smaller drop than the New Zealand average of 6.7%pa. Commercial vehicle registrations fell 1.4%pa, compared to a 1.6%pa rise New Zealand-wide.

The building and housing markets in Northland were generally positive over the 12 months to December 2018. Non-residential construction values grew 53%pa in Northland, driven by a 102% increase in the Far North from education and healthcare related construction.

Tourism guest nights in Northland increased 0.7%pa over the 12 months to December 2018, below the New Zealand average of 2.3%pa. Tourist arrivals growth has been slower in 2018, and we expect this to continue into 2019. Tourism expenditure in Northland fell 0.3%pa, against a 4.3%pa rise in nationwide tourism spending.

Overview of national economy

Throughout 2018, business confidence indicators suggested the New Zealand economy was going to crash and burn. But although growth slowed slightly, there were no other signs we were staring down the barrel of a full- blown recession. Looking to 2019, New Zealand’s domestic economy remains in a similar position to 12 months ago: prospects of middling growth, somewhat hampered by capacity constraints and a tight labour market, and with some of the biggest potential shifts being driven by government policies (such as migration or the housing market). In contrast to this largely unchanged domestic picture, many question marks have appeared during the last year over the international economic environment.