QEM Media Release 15 August

Written by Jason Petterson

Posted on Tuesday 15 August 2023

MEDIA RELEASE

Tuesday 15 August 2023

Nelson Tasman economic momentum continues 

The latest Infometrics Quarterly Economic Monitor June 2023 has been published today by the NRDA as part of its regional economy data and insights programme.     

Results show the Nelson Tasman economy continuing to out-perform the national average in the year ending June 2023, with GDP rising 3.8% compared to 3.1% for New Zealand.  However, the Monitor also shows economic activity is slowing down under tougher economic conditions including high inflation and high interest rates; In the June 2023 quarter, Nelson-Tasman’s GDP growth slowed to 0.6%pa, while the national economy slowed to 1.4%pa. 

“The Monitor highlights a number of areas of stronger and varied performance across our region compared to national average, but also comments that weather events, weaker global economic activity, and still-high cost increases, have weighed on primary sector output, and the outlook for construction activity has turned weaker. We need to keep this in mind when looking forward and planning for the future,” Fiona Wilson, CE of NRDA says.

Gareth Power Gordon, NRDA’s Manager Regional Strategy and Investment, says the Monitor shows that there are some challenges currently facing the region. “Numbers of residential building consents issued have increased, however the total value of non-residential consents in Nelson Tasman decreased by 14.1% over the year to June 2023, compared to a year earlier, where nationally it gained for the year. While tourism expenditure and guest nights have improved 18.2% and 23.2% respectively, these are both below the national growth rate.”

“For housing, house values have fallen lower than the national average, dropping 8.8% compared to a 11.1% drop throughout the country. House sales dropped 11.9%, but again this is compared to the national drop of 20%. This shows the local housing market is holding up better compared to other areas.”

“Figures for tourism for Nelson Tasman, show a sector still recovering after the impacts of (COVID-19) closed borders, and particularly the August 2022 floods and the road closures that followed.  However, we should also note that domestic visitors in Nelson Tasman which accounted for 67% of visitor spend in 2019 (pre-pandemic) (Infometrics Regional Economic Profile), compared to 59% nationally, continued to support the region relatively well during closed borders and the return of international visitors has therefore provided less of a ‘boost’ to the overall spend and guest night figures for this region than for some more international-tourist focused areas,” says Fiona.

“While positive economic news is always welcome and shows we are moving in the right direction, we know that our long-term issues including low productivity, low wages and high housing costs will not be solved in the short term and will require long-term investment and commitment. We also remember that these quarterly figures are subject to fluctuation, and we are in a very challenging regional and national context,” says Fiona.

Releasing the QEM nationally,  Brad Olsen, Infometrics Chief Executive and Principal Economist points to continued challenges:  “Expectations remain for a challenging period across the economy over the next 12 months as higher interest rates continue to subdue spending and investment, with the labour market set to become less tight as more people become available for work exactly as fewer jobs are offered up.”

NRDA receive the economic monitor on a quarterly basis. The Monitor is one of the economic analysis products NRDA provides to support local businesses and decision makers.

Copies of the full Quarterly Economic Monitor report are available at https://www.nelsontasman.nz/do-business/insights/

ENDS

For more information, please contact: Gareth Power Gordon, Manager Regional Strategy and Investment, gareth.powergordon@nelsontasman.nz

For more information about the full economic insights NRDA provides, please visit https://www.nelsontasman.nz/do-business/insights/

Notes for Editor: Other Key Points

Key points highlighted in the QEM include:

• Increased consumer spending in the region, but lagging behind national growth of 12% (Nelson-4.6%; Tasman 11%), suggesting a real decrease in household spending and potentially weakening household confidence.
   
• Employment up 1.8% in Nelson and 3.0% in Tasman compared to a year earlier (NZ average 2.6%), across broad based sectors.  However, unemployment remaining very low (3.1% Nelson; 2.9% Tasman), noting it edged up over the past quarter and is expected to edge upwards over the coming year as national economic conditions remain muted.
   
• Fall in current house value compared to a year earlier reflective of the national trend brought about by rising interest rates, (Nelson down by 7.1%; Tasman slightly sharper at a 10.5% fall (NZ average 11.1% fall).
   
• Nelson Tasman ‘bucking the trend’ with construction activity:  As activity is slowing around the country, brought about by slowing house prices and rising interest rates, in Nelson Tasman the numbers of new dwelling consents rose  by 4.2% overall, compared to national decline of 12% (Nelson +7.4%; Tasman +2.7%). 
  
  
• Non-residential building consents issued during the year to June 2023 showed different patterns across the region, with total value of $48.7 million in Nelson and $63 million in Tasman.  In Nelson this reflected a 23.9% increase in numbers of consents issued; in Tasman a 30.6%  decrease (NZ overall was a 10.7% increase in numbers of consents issued).  In Nelson, particularly, Infometrics point to the increase making for strong construction workloads overall as the broader region recovers from last year’s floods.  In Tasman, non-residential building consents have eased after a year of elevated activity, and remain above the district’s long term average.
   
• Visitor spend growth of 18.2% for the region (16% Nelson; 21% Tasman, compared to NZ 32%); Guest nights (commercial accommodation) increased on June 2022 in Nelson Tasman by 23.2% (Nelson 27%, Tasman by 19%^[1], compared to NZ 62%).  In comparison to pre-pandemic, international visitor numbers for Nelson Tasman in the June 2023 quarter were at 69% of June 2019 (pre-pandemic) (national 76%); while domestic visitors to the region were at 91%[2] of pre-pandemic (June 2019)
   
• A national picture of a slowing recovery of international arrivals from April, in comparison to a higher monthly gain over the last 12 months:  “Whether this slower growth is driven by a maturation in our tourism recovery, or a softer global economy constraining household spending, it signals a transition into a slower tourism recovery” (Infometrics QEM).

About Nelson Regional Development Agency

Nelson Regional Development Agency's mission is to unlock the economic potential of Nelson Tasman to enable our people and places to thrive.