Porirua City Quarterly economic monitor - December 2019

| Portal

Overview

Indicator Porirua City Wellington Region New Zealand
Annual average % change
Gross domestic product
2.2%
2.5%
2.3%
Traffic flow
1.9%
1.0%
1.7%
Health Enrolments
1.2%
2.5%
2.3%
Consumer spending
5.2%
4.0%
3.3%
Residential consents
55.0%
16.2%
13.8%
Non-residential consents
91.3%
67.4%
5.2%
House prices*
10.3%
9.3%
3.6%
House sales
-6.4%
-1.9%
-1.0%
Tourism expenditure
4.7%
6.9%
3.5%
Car registrations
-9.9%
-6.1%
-8.6%
Commercial vehicle registrations
-7.7%
-14.2%
-6.9%
Jobseeker Support recipients
3.1%
4.4%
10.6%
Level
Unemployment rate
4.3%
3.5%
4.1%
* Annual percentage change (latest quarter compared to a year earlier)

Overview of Porirua City

Porirua’s economy remains robust with Infometrics’ provisional GDP estimate for the city growing 2.2% in the December 2019 year and traffic flows, a useful indicator of economic activity, growing 1.9%. Nationally, consumers remain relatively upbeat about the economy and this is reflected in electronic card spending on retail purchases in Porirua growing 5.2% in the December 2019 year, compared with 4.0% growth across the Wellington region and 3.3% growth nationally.

Porirua’s population growth eased slightly, growing 1.2% in the December 2019 year. This seems to be contributing to softer housing market conditions with house sales down 6.4% in the December 2019 year. Despite falling sales, house price inflation in Porirua remains elevated with prices rising 10% in December 2019 as low mortgage rates and upbeat consumer confidence encourages property buyers to go the extra yard.

Residential consents in Porirua grew 55% in Porirua in the December 2019 year on the back of a particularly strong June 2019 quarter. However, June’s surge has not been maintained with the December 2019 quarter figure coming in 10% below the 10-year average. Non-residential consents in the city grew 91% in the December 2019 year, capping off a very strong year.

The city’s unemployment rate fell again to 4.3% in the December 2019 year, reflecting a fall in the national unemployment rate to 4.1% and in the Wellington region to 3.5%. Porirua’s Jobseeker Support recipient numbers rose 3.1% in the December 2019 year, which compares well with 4.4% growth across the region and 10% growth nationally. Our view is that the government’s more lenient stance towards beneficiaries is encouraging more people to claim Jobseeker Support.

Overview of national economy

The economy looks to have turned a corner, at least temporarily, at the end of 2019. Although growth has slowed, some near-term indicators have shown an improvement. Traffic flows, tourism spending, and house prices have all shown renewed growth, and are set to provide a foundation for further growth in 2020. Government spending activity over the medium term also looks to support economic growth, but there remains little in the way of fundamental growth drivers over the next five years. With economic growth shifting down a gear in recent years, headline growth is likely to settle at a softer level. However, a significant risk to growth in 2020 is presented by the COVID-19 outbreak, which will restrain tourism and export activity, and could threaten consumer and business activity if the outbreak continues or spreads to New Zealand.