Quarterly Economic Monitor from Infometrics reflects a modest uplift to GDP but the impact of COVID is still being felt by many.
Posted on Thursday 18 August 2022
The Infometrics Quarterly Economic Monitor (QEM) was released on Thursday 18 August for the June 2022 quarter.
The data is painting a picture that will not come as a surprise. Overall it shows a reasonable year under the circumstances, although as always this masks the localised and sector-specific pain that is still being felt.
GDP growth was above national levels, although not evenly spread across Nelson and Tasman due to the differing industry mixes. Employment was up, Jobseeker numbers came down (although still above the ten-year average) as did unemployment, and $130m of non-residential consents granted suggests that investment is continuing.
Working from home is likely to still be a factor impacting consumer spend in Nelson City, and inflation will be masking the true extent of the decrease.
We have summarised some highlights from the report below. For the full QEM report, please visit our Insights Page.
- June 2022 GDP figures just released show a modest but positive uplift of 1.2% for the year in Nelson Tasman. This compares to an increase of 0.8% nationally. These figures must be taken in the context of a sharp rebound in GDP in the year to June 2021 which saw Nelson Tasman climb by 6.6%, following the Covid-19 related slowdown. This will make current figures look more modest by comparison. This year’s GDP growth was very unevenly split between the regions. Nelson City saw a decline of 0.8% in the year to June 2022, whilst Tasman District grew by 3.6%. This is to some extent reflected in figures for traffic flows, which were down by 9.3% for Nelson Tasman overall but again were unevenly split between Nelson City (down 11.2%) and Tasman District (down 8.3%). This is likely due to the differing nature of work between the two territories with Nelson City workers more likely to be able to work from home; high construction traffic in Tasman and of course the lack of international visitors affects both areas.
- Consumer spending was down overall by 0.5% in the year, but whilst spending fell by 3.3% in Nelson City it actually grew by 2.7% in Tasman District. Again this is likely to be partly because of reduced foot traffic in Nelson City due to working from home. It is likely that the high inflation of recent months has masked the true extent of spending changes. Nationally consumer spending rose by 4.5% in the June quarter compared to March and around 40% of this growth is attributed to inflation.
- Employment grew by 2.7% in the year to June, compared to 3.2% growth for the country as a whole, and this may be partly due to Jobseekers coming off benefit. The modest growth reflects the tight labour market both regionally and nationally, as job adverts remain high and recent wage increases have reached record levels. The 25-29 age group as a proportion of total employed persons has reduced again and this may be early indication of a brain drain as the pent-up demand for going overseas starts to release.
- Jobseeker support numbers fell markedly in the year, down 10.6%, compared to New Zealand at 9.7%. However the total numbers are still higher (3,189 for Nelson Tasman) than the 10-year average of 2,677 people. The regional unemployment rate now sits at 3.2% compared to 3.3% for total NZ. The national figure was a slight increase from 3.2% and this is attributed to higher levels of sickness reported by survey respondents. The unemployment rate is still very low by historical standards.
- Visitor spend was down by 9.5% for Nelson Tasman in the year to June 2022. Again this was very unevenly spread between the two territories, with Tasman District down by 5.4% but Nelson City down by 13.4%. Inflation will be masking the true extent of the decrease here as it has done with consumer spend. Total spend for Nelson Tasman was $275m for the year, compared to $304m in the previous year. Nationally the figures were down 6.6% and it should be noted that the reporting period includes the half year of Delta restrictions followed by a half year of Omicron disruption. Furthermore this should be taken in the context of a bit uplift in spend for the June 2021 year as things bounced back after initial Covid-19 impacts
- Visitor nights decreased in the year by 19.4% (16.4% Tasman District, 22.7% Nelson City) which was on a par with the national figure of 19%. Nationally, international visitor numbers were up 15.1% in the June 2022 quarter compared to June 2021 and generally are expected to increase as the international market recovers, although the ongoing challenge of staffing in hospitality may present problems.
- Residential building consents for the June 2022 year were down 6.7%. The decrease was driven by Tasman District, down 9.1% compared to 1.2% for Nelson City. This is in direct contrast to the national figure which increased by 14.4% for the year. Non-residential consent values however grew in the region by 64% this year, almost entirely driven by Tasman District. This is likely to be reflecting commercial developments to support the large new housing developments in Tasman – shops, cinema, big box retail and so on. The total value of $130.1m is a ten-year peak.
- For housing, despite reported house price declines in the last few months, average house values in Nelson Tasman still rose by 12% overall in the year to June 2022, compared to 9.6% for total NZ. The average house price is Nelson Tasman at June 2022 is $858,287. House sales fell however by 24.4% in the year for Nelson Tasman compared to 26% for total NZ as all regions saw a decline. This is in the context of recent high inflation and higher interest rates than have been seen for some time, which are impacting household wealth and lender affordability tests.