Region steady amid recession
New Zealand slipped into a recession in the last economic quarter, new data has revealed, but an economist says Canterbury’s overall economic outlook is steady.
The country’s Gross Domestic Product (GDP) shrank by 0.1% in the December 2023 financial quarter, according to Stats NZ data released yesterday, and it followed a 0.3% GDP drop the quarter prior.
While Stats NZ isn’t due to release an annual report with regional GDP data until Tuesday, economic analyst Sophie Jones says recent Infometric data indicates that Christchurch’s economic growth isn’t slowing as much as the national average.
Jones, an analyst for ChristchurchNZ, says estimates put Christchurch’s annual GDP growth at 1% in 2023, just above the national average of 0.7%, and it may be due to the economic diversity of the region.
According to ASB’s latest economic scoreboard – which was released on Wednesday and measures annual growth across 11 categories – Canterbury ranks 6th out of 16 regions for economic performance.
ASB chief economist Nick Tuffley says the result doesn’t mean Canterbury’s economy has weakened over the last year – in fact it was relatively steady – rather, it meant that other regions had greater wins. “It’s been a bit like the Crusaders, where for a very long period it's [Canterbury] been quite dominant ... but it’s pretty hard to just keep growing well above average, all the time,” he said.
Auckland and Otago, which ranked first and second on the scoreboard, saw a steeper growth in population over 2023 – 2.8% and 2.7% respectively, compared with Canterbury’s 2%. When it came to construction, Hawke’s Bay – which scored 3rd overall – grew by a whopping 11.2% and was one of only three regions which saw growth in that sector. Canterbury’s sunk by 18.4% in comparison, but the worst performer in this category was Waikato at -35.8%.
Canterbury was one of only two regions which saw house prices increase. It rose by 1.4% for a median price of $683,000. Otago’s median price is about $16,000 lower, but overall the price grew 2.7% in 2023.
According to ChristchurchNZ’s online economic data dashboard, during the December quarter Christchurch’s median house price rose by 2.9%, where Auckland and Wellington prices fell by 1.3% and 1.1% respectively.
Another way to look at a region’s economic resilience is to consider how many people are struggling to pay bills. Overall arrears has hit a seven year high, according to Centrix’s February credit indicator, up 9.6% year on year.
People under 25 are significantly more prone to cash flow problems, but the report said the squeeze was now showing in the 30-40 year old demographic.
Some 1.47% of mortgages are behind on repayments – over 21,800 accounts – the highest record since pre-Covid-19.
Residents in the Selwyn district have the fourth lowest rate of overdue bills in the country, at 10.21%.
Its Canterbury neighbours didn’t make the top ten list of lowest arrears, but were marked light green on the Centrix map, indicating overall arrears are less than 12%.