Northland Region Quarterly economic monitor - June 2020

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Indicator Northland Region New Zealand
Annual average % change
Gross domestic product
Traffic flow
Health Enrolments
Consumer spending
Residential consents
Non-residential consents
House prices*
House sales
Tourism expenditure
Car registrations
Commercial vehicle registrations
Jobseeker Support recipients
Unemployment rate
* Annual percentage change (latest quarter compared to a year earlier)

Overview of Northland Region

Northland’s economy has taken a knock from the COVID-19 pandemic, with economic activity falling broadly in line with the national average decline. Provisional Infometrics estimates show a 1.9%pa decline in economic activity in Northland, a slightly smaller fall than the 2.1%pa national decline.

The mixed fortunes of the region underscore the various industry-level economic impacts – tourism and construction activity look weaker in Northland, but primary sector activity is showing resilience.

Traffic flows in Northland showed a 10.5%pa decline, slightly larger than the national decline, as tourist traffic dwindled, freight movements softened, and local driving tailed off.

However, consumer spending showed more resilience, even if Northlanders weren’t moving around as much. Marketview data shows a 12.4%pa decline in spending in the June quarter alone – although a steep hit, this spending fall was the second smallest fall of New Zealand’s 16 regions, and meant that spending over the last 12 months was slightly positive with a 0.09%pa rise.

A resilient primary sector has supported Northland’s economy, with food exports including meat, dairy, and horticultural goods performing well over the June quarter. The dairy season just finished is expected to have delivered $612m to the Northland economy, a $79m boost on last season, which will support economic activity.

However, other key sectors show more pain. Construction activity is set to slow, with residential consent numbers down 17%pa and non-residential consent values down 6.1%pa. The sector employs around 11% of the Northland workforce, underscoring its economic importance. Infrastructure investments from the PGF and additional shovel-ready projects will pick up some of the slack, supporting the sector moving forward.

Tourism also took a blow, with visitor spending down 8.6%pa over the June 2020 year with spending lower by $96m as international travellers remain absent.

Northland’s labour market remains in a tough position, with the region recording one of the largest rises in the proportion of the working age population needing support, with an additional 2.3% of the working age population covered by a Jobseeker Support benefit. At the end of June 2020, more than 10% of the working age population in Northland was on a Jobseeker Support benefit, the highest proportion in New Zealand.

Overview of national economy

The New Zealand economy took a severe hit during the June 2020 quarter, as the COVID-19 pandemic saw the country locked down at home for around four weeks at Alert Level 4, before a rapid move down the Alert Levels to Level 1 in early June. The economy has endured a dramatic shift in focus, from life support at Level 4 to an adrenaline rush at Level 1. Yet the immediate economic ramifications are clear to see – economic activity has fallen, nearly 50,000 Kiwis lost their jobs, businesses struggled to cope with lower earnings, and incomes were reduced. The June quarter likely represents the largest single hit to the economy, but the economic scarring and restructuring will continue to occur over the coming years. New Zealand is not out of the woods yet.