Whangarei District Quarterly economic monitor - June 2020

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Indicator Whangarei District 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 Whangarei District

Whāngārei’s economy has been jolted by the economic hit of COVID-19, with a decline in economic activity of 2.0%pa over the June 2020 year according to provisional Infometrics estimates – in line with the decline in activity nationally. Whāngārei’s GDP declined by 11.8% in the June quarter compared to the same quarter last year.

A persistent drop in construction intentions has pushed activity lower, with residential consent numbers below the 10-year average, after a strong six-year period of expansion. Non-residential activity has held up but isn’t enough to offset the residential decline. With Whāngārei’s larger construction sector concentration, these declines will hit economic activity harder. Additional shovel-ready spending will resist some of this decline.

Lower tourism spending has also contributed to the knock on the economy, with a 9.7%pa decline in tourism activity stripping out $47m over the last 12 months. However, this decline in tourism activity is not as bad as than the national decline of 12.3%pa.

The number of people needing working in Whāngārei reinforces this observation – compared to June 2019, there were just over 1,300 additional people supported by Jobseeker Support or the COVID-19 Income Relief Payment. This increase is less than the national average.

Relatively lower job losses have kept the economy moving to a degree, with traffic movements in Whāngārei, down 6.6%pa, not hit as hard as the national average (a 9.4% hit), with trucks and people still moving around the key hub of Northland.

With lower relative job losses, consumer spending has showed slightly more resilience than the national average, even though Whāngārei spending has still declined 0.8%pa over the year to June 2020. Spending in the June quarter in Whāngārei was 14.9% lower than same quarter last year, compared with a 20% nationwide drop.

With substantially lower oil prices expected to remain, there are rising concerns over the Marsden Point refinery, with open discussions over how the refinery, which makes up over 11% of Whāngārei’s economy, could cease operations.

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.