Porirua City Quarterly economic monitor - December 2018

Overview

Indicator Porirua City Wellington Region New Zealand
Annual average % change
Gross domestic product
2.6%
2.3%
2.7%
Traffic flow
1.9%
3.1%
2.7%
Health Enrolments
2.1%
1.6%
1.9%
Consumer spending
5.2%
4.2%
4.5%
Residential consents
-20%
19%
6.1%
Non-residential consents
-49%
-13%
9.0%
House prices*
4.7%
9.8%
2.3%
House sales
-0.7%
-1.7%
3.1%
Guest nights
8.5%
1.9%
2.3%
Tourism expenditure
6.0%
4.6%
4.3%
Car registrations
1.6%
-4.4%
-6.7%
Commercial vehicle registrations
13%
8.8%
1.6%
Jobseeker Support recipients
3.1%
4.4%
4.8%
Level
Unemployment rate
6.3%
4.6%
4.3%
* Annual percentage change (latest quarter compared to a year earlier)

Overview of Porirua City

Infometrics’ provisional GDP growth estimate for Porirua City eased to 2.6% in the December 2018 year compared with 2.7% nationally and 2.3% across the Wellington region as a whole.

Commercial vehicle registrations continued their stand-out performance, growing 13% in the December 2018 year next to a national average of just 1.6% and a regional average of 8.8%. Porirua’s tourism sector also had a good year with guest nights up 8.5% in the December 2018 year and tourism spending up 6.0% to an unprecedented $98.5m.

Consumer spending growth accelerated throughout 2018, rising 5.2% in the December 2018 year compared with a national average of 4.5% and a regional average of 4.2%.

The Porirua housing market is currently a mixed bag. Sales fell 0.7% in the December 2018 year, but look to have plateaued after falling for much of 2016 and 2017. House prices in Porirua grew 4.7% in the December 2018 year but continue to weaken and are well down on their peak of over 20% in 2016. We have recently begun using enrolments at primary health providers as a timely proxy for population growth. Population growth in Porirua strengthened in the past year, growing 2.1% in the December 2018 year, which should keep a floor under sales and prices going into 2019.

Residential building consents in Porirua fell 20% in the December 2018 year; 2018 wasn’t a bad year for residential consents, its just that 2017 was a particularly strong year. It was a similar story for non-residential consents which fell 49% in the December 2018 year following an exceptionally strong 2017.

Porirua’s unemployment rate rose slightly to 6.3% in the December 2018 year, although the trend has been consistently downward for the past two years. With the national average at 4.3%, it’s hoped that continued economic growth in Porirua will see that gap close in coming years.

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.