Porirua City Quarterly economic monitor - September 2018

Overview

Indicator Porirua City Wellington Region New Zealand
Annual average % change
Gross domestic product
3.1%
2.6%
2.9%
Traffic flow
4.2%
4.4%
3.9%
Residential consents
-18%
13%
5.4%
Non-residential consents
84%
-23%
4.9%
House prices*
8.9%
12%
8.4%
House sales
-4.3%
-2.2%
-0.6%
Guest nights
1.8%
2.1%
2.7%
Retail trade
3.8%
4.7%
4.8%
Car registrations
7.7%
0.8%
-1.7%
Commercial vehicle registrations
10%
8.3%
2.3%
Jobseeker Support recipients
1.7%
2.7%
2.2%
Tourism expenditure
6.5%
7.0%
8.2%
Level
Unemployment rate
6.0%
4.4%
4.3%
International net migration
81
3,269
62,735
* Annual percentage change (latest quarter compared to a year earlier)

Overview of Porirua City

Growth in the Porirua City economy picked up in the September 2018 year, with GDP expanding 3.1% compared with 2.6% across the Wellington region. This uptick in growth contrasts with a softening in several key indicators.

Last quarter we emphasised the strength of Porirua’s business investment indicators. Investment growth has softened a little this quarter but remains strong compared with the broader region and the national average. Commercial vehicle registrations grew 10% in the September 2018 year, compared with 8.3% growth across the Wellington region and 2.3% nationally. The construction sector accounts for most commercial vehicle registrations in Porirua. Builders’ willingness to invest in new vehicles has been boosted by strong non-residential activity. The value of non-residential consents grew 84% in the September 2018 year compared with a 23% decline across the Wellington region and 4.9% growth nationally. Porirua’s growth was driven by investment in education and industrial buildings, partially offset by declines in shops, restaurants and bars, office buildings, and hospitals and nursing homes.

Porirua house sales were down 4.3% in the September 2018 year. Declining house sales have seen Porirua’s house price inflation fall from a peak of 25% in the September 2016 year to 8.9% in the September 2018 year. A recent decline of residential consents in Porirua might support continued house price inflation going into 2019. Residential consents fell 18% in the September 2018 year, in contrast to 13% growth across the Wellington region and 5.4% growth nationally.

Electronic card spending on retail purchases in Porirua grew 3.8% in the September 2018 year, which is a little subdued next to 4.7% growth across the Wellington region and 4.8% growth nationally. At 6.5%, tourism expenditure growth in the September 2018 year also came in below the regional and national averages. The city’s unemployment rate refuses to fall below 6%, while 1.7% growth in the average number of Jobseeker Support recipients compares well next to 2.7% growth across the Wellington region and 2.2% nationally.

Overview of national economy

We’ve revised up our forecasts of economic growth. It’s not a big change – our growth projection for the year to June 2019 has lifted from 2.7% to 2.9%. But it’s an upward revision and so is at odds with the air of despair being generated by negative business and consumer confidence surveys. Better economic growth in the near term is largely about government spending. Aside from government spending, the other major upward revision is the export outlook. Export prices are at their highest level since 2014 in NZ dollar terms.