The region’s economy is coming back, but hasn’t made up the ground lost during lockdown, according to the latest Quarterly Economic Monitor from Infometrics.
And once again, Hawke’s Bay’s strong primary sector is insulating the region from the worst economic effects.
“Long term trends of strong consumer spending, brisk house price inflation and record consenting activity supporting the construction sector are all playing a part in keeping things ticking over economically,” says Business Hawke’s Bay CEO Carolyn Neville.
Highlights of the report include a 2.7% increase in provisional GDP in the September quarter while that represents a 1% drop over the last 12 months, we’re still doing better than New Zealand overall. Electronic card spending was up 12% for the quarter and 2.5% for the year; house prices rose 11.1%; and a record number of residential consents were issued.
The fly in the ointment is tourism, with spending decreasing and Infometrics estimating that nationally, NZ could lose $1.2 billion a month from the loss of international tourism, even taking into account an expected lift in domestic tourism.
“Tourism remains an area of weakness as we look to the summer peak. With no international tourists or cruise ships visiting Napier this season, there’s a big spending gap to be filled. Every regional tourism operator will be competing hard for domestic visitors, who do not spend at the same level as internationals. And while spending by tourists was down 6.8% in the September 2020 year, that compared to a 16.5% drop nationally,” says Neville.
Unemployment was a mixed bag, up .2% to 4.9%, higher than the country’s overall rate of 4.4%. “Although Covid has had an impact, it appears that seasonality is the bigger driver in the decline in filled jobs, with agriculture, forestry and fishing sectors losing more than 2,000 roles between March and August, followed by a loss of nearly 1,000 roles in admin and support services over the same period.”
Consumer spending is strong across the Bay, with growth in Wairoa leading the way. Napier lags behind the other centres, but is still up 6.0% for the July-October period. Tills rang to the tune of $536 million in the September quarter, up from $480 million in the same period last year.
The average current house value in Hawke’s Bay rose 11.1% in the year to September 2020, and is outperforming New Zealand’s overall house price growth, which was up 8.0%. There were 321 residential consents issued in the September quarter, compared with 203 in the same quarter last year. A new peak of $229 million was reached for Hawke’s Bay non-residential building consent during the year to September, increasing by 43% compared to a year earlier.