Timaru District's economic growth and spending slows after outpacing national figures twice
Friday, 24 February 2023
The Timaru District’s economic growth and spending have come in just below the national average in the latest quarterly economic report after previously outpacing the national figures for two consecutive quarters.
The figures released by analyst firm Infometrics on Friday, produced for Venture Timaru, show the District’s growth for the year to the end of December 2022 is 2.5%, compared to 2.8% nationally, while consumer spending has grown 6.8% in the district, compared to 10% nationally.
Before that, provisional GDP estimates for the 12 months to the end of September 2022 showed Timaru District’s economy grew by 3.8%, outpacing the national growth of 2.6%.
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“We’re tracking slightly below the national figures, but our economy is still performing pretty well,” Venture Timaru chief executive Nigel Davenport said.
“We traditionally perform strongly in the first half of the year, so we expect to see our GDP performance pick back up to at or above national levels come next reporting period to March 2023.
“These figures don’t include the likely increase in spending we are expecting to see from the international cruise visits coming to town. It’ll be interesting to see the effect that the influx of international visitors has on spending during the January – February period.”
There was a slight increase in employment of Timaru residents at 0.6% over the year which was driven by “strong growth in manufacturing, education, and health industries,” Davenport said, while Timaru’s unemployment rate remains a “very low 2.9%, below the national average, showing the tight labour market.”
Timaru’s house values have gone up compared to the national decline recording a rise of 4.5% between December 2021 and December 2022.
“But we’re still rating as one of the most affordable places to buy a house in the country, with the average house value just over $518,000,’’ Davenport said.
“As always, our challenge is to try to attract more people to come and live here and fill the job vacancies in our businesses. Having this affordable housing is a really key element in attracting potential workforce, and it’s something that we continue to push in our recruitment campaigns,’’ he said.
“We are also continuing to press for a more enabling and innovative regulatory environment to address our housing shortage issue – primarily to ensure that a more diverse range of housing options come to market.’’
However, the Mackenzie District has been dubbed the third-fastest growing territorial authority in New Zealand thanks to the return of international tourists to the region.
Infometrics quarterly economic monitor for the district from September to December 2022 shows the GDP was 5.8% higher compared to the same period in 2021, the third-fastest growing territorial authority in the country according to Infometrics provisional GDP estimates.
The report also said the district’s GDP over the year to December 2022 was 2.1% higher than 2021.
The increases do not stop there as employment of Mackenzie residents grew 1.3% over the year to December 2022, just behind national growth of 2.5%.
“Mackenzie’s growth was driven by the recovery of international tourism, with 50 jobs added in accommodation and food services,” the report says.
“Unemployment in Mackenzie has come down steadily throughout the year, to average an ultra-low 1.4% for the year to December 2022, half the national rate of 3.3%.”
Consumer spending in Mackenzie grew by a “blistering” 16% over the year to December 2022 according to Marketview data, fuelled by the recovering tourism expenditure.
Tourism expenditure in Mackenzie grew 18% over the year to December 2022, in line with national growth of 19%.
“Guest nights at commercial accommodation grew 28% in Mackenzie District, outpacing national growth of 22% as international visitors came back in numbers.”
House values in the district rose 3.2% between the December 2021 and December 2022 quarters, faring better than the national trend of a 9.2% decline.
“Mackenzie’s housing remains among the country’s most unaffordable, with the average house worth $711,288, amounting to 10.5 times average household incomes for the area.
“New dwelling consents in Mackenzie rose 4.2% in the year to December 2022, with 20 new dwellings consented in the December 2022 quarter.
South Canterbury Chamber of Commerce chief executive Wendy Smith said it is a “little disappointing” to see the Timaru District’s GDP figures drop behind the national average but it’s “nothing to get alarmed about as these have been challenging and lumpy trading times with inflation continuing to have a major influence”.
“The rapid return of tourism has certainly benefited our key tourism destination the Mackenzie District and this activity has also bolstered the broader transport sectors,” Smith said.
“Economic commentators suggest the construction sector maybe working at capacity, and the primary sector continues to struggle with higher costs and fewer workers.”
“Across all three districts the shortage of skilled and unskilled workers is a major prohibiter to growth for businesses and alongside other actions the Chamber continues to lobby for more friendly immigration policies to bring in the support we need.”