Whangarei District Quarterly economic monitor - March 2020

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Overview

Indicator Whangarei District Northland Region New Zealand
Annual average % change
Gross domestic product
1.1%
1.3%
1.7%
Traffic flow
-0.09%
-1.1%
-0.2%
Health Enrolments
2.4%
1.8%
2.5%
Consumer spending
4.0%
4.7%
3.0%
Residential consents
-8.4%
-6.0%
9.0%
Non-residential consents
-9.1%
-21.1%
-0.4%
House prices*
4.3%
4.6%
5.9%
House sales
4.5%
1.3%
2.0%
Tourism expenditure
0%
0.9%
1.4%
Car registrations
-9.6%
-8.6%
-11.5%
Commercial vehicle registrations
-2.0%
-6.9%
-12.8%
Jobseeker Support recipients
12.1%
11.8%
11.7%
Level
Unemployment rate
4.4%
5.0%
4.1%
* Annual percentage change (latest quarter compared to a year earlier)

Overview of Whangarei District

Whāngārei’s economy is already feeling the first impacts of the COVID-19 pandemic and resulting recession. Provisional estimates from Infometrics point to economic growth in Whāngārei slowing to 1.1%pa over the 12 months to March 2020, with better spending activity not enough to offset declines in construction activity and lower traffic flows.

Some parts of the local economy continue to hold firm as New Zealand enters a severe economic downturn. Health enrolments grew by 2.4%pa over the 12-month period suggesting that the population continues to grow. A growing population has contributed to higher consumer spending, with Marketview data showing spending growth of 4.0%, above the Northland and New Zealand average. However, we expect household spending will become more cautious in coming quarters, as job losses, lower hours, and possible pay cuts limit household budgets.

Some of these concerns are already apparent, with Jobseeker Support recipient numbers in Whāngārei rising by 12.1%pa over the 12 months to March 2020, slightly above the regional and national increase. Although we expect job losses to continue to mount, both in Whāngārei and elsewhere, the initial burst of jobseekers will appear in the June quarter figures, with the Government’s wage subsidy scheme keeping a lid on further rises until later in 2020.

Further falls will also be seen in traffic flows, which recorded a softer profile in Whāngārei over the March 2020 year, down 0.1%pa. However, the national decline was slightly worse, at -0.2%pa. Less traffic on the roads indicates that freight activity has slowed, as business activity falls.

Lower activity is expected going forward, a view reinforced by falling residential building consent numbers, and a lower value of non-residential construction consented over the March 2020 year. With more uncertain times, we expect construction efforts to slow further, which will contribute to the 3,400 job losses that Infometrics is forecasting over the next 12 months.

Overview of national economy

The COVID-19 pandemic has upended the economy and plunged New Zealand into the sharpest recession in living memory. The March quarter includes the full progression of the virus, from its origins in China and subsequent hit to New Zealand exports, through to border closures forcing lower tourism arrivals, before culminating in the lockdown of New Zealand under Alert Level 4. Our March 2020 Quarterly Economic Monitor only captures the initial economic effects of putting the New Zealand economy on life support. The June Monitor will better reflect activity changes. No sector of the economy will be spared, with the regional impacts dependant on the local economic structure – Infometrics is now forecasting the loss of 250,000 jobs nationally over the next year, followed by a long period of restructuring the economy.