Southland GDP higher than pre-Covid levels
Southland’s gross domestic product exceeded pre-Covid levels in the year to March after two years of stagnation.
A report by economic consultants Infometrics, released on Wednesday, shows the Southland region’s GDP was $7.2 billion for the year to March, a rise on $6.9b from the previous three years (adjusted for inflation).
This year’s figure represents a 5.4% increase and also outpaces the national average increase, by 0.2 of a percentage point.
Southland Business Chamber president Neil McAra said high commodity prices during the past 18 months, particularly dairy pay-outs, were a driving factor.
Dairy pay-outs were a significant factor in Gore particularly, he said, as Gore’s GDP increased 9.8%.
Of the region’s $7.2b GDP, Southland district contributed
$2.7b, Gore contributed $944 million and Invercargill contributed $3.6b.
There was a little more business confidence in the regions than the bigger centres, McAra said, citing ANZ survey results which say business confidence is approaching record lows nationwide.
Southlanders chasing the housing demand cycle and getting houses ready was keeping consents high, McAra said.
Southland-wide residential consents spiked 36% in the year to March, with 480 consent issued, it says in the Infometrics report. The region’s 36% increase in residential consents is 12 percentage points higher than the national figure.
One concern which jumped out at McAra from the report was labour participation, which was a problem nationwide.
‘‘Every sector has got not enough people,’’ he said.
Southland regional development agency Great South commissioned the Infometrics report.
Agency board chair Ian Collier said data centre and aquaculture projects in Southland required heavy capital investment and ‘‘it’s good to have them on the radar’’.
The GDP was driven by commodity prices and also construction, evidenced by the consent figures, Collier said.
The potential closure of the Tiwai Point aluminium smelter had seen the emergence large potential projects like green hydrogen production and data centres, Collier said.
Southland was well-placed for the future with new hotels, Invercargill’s inner-city retail development and aquaculture opportunities, he said.
‘‘These are exciting times and it’s important that we do all we can to convert the opportunities we have to diversify and strengthen our economic performance as a region.’’
Tourism figures were also strong given the ongoing Covid-19 pandemic, Collier said.
Tourism expenditure bounced back strongly in the year to March, with total annual expenditure in the Southland region up 13.1% to $270m, it says in the Infometrics report.