Child poverty statistics highlight Canterbury’s economic challenges
Child poverty statistics for the year to June 2023 were released in February, and highlight increasing economic pressures since the last time they were measured in 2021. Estimates for Canterbury show that approximately 18.7% of children live in low-income households after accounting for housing costs – this compares to 14.4% in 2021. This represents around 25,000 children across the region.
An estimated 10.1% of children in Canterbury experience material hardship – living in households that are unable to afford essential items like fresh produce or doctor visits. The figure was 8.1% in 2021.
The impacts of child poverty extend beyond immediate circumstances, and can affect long-term outcomes related to education, health, employment and overall wellbeing.
For the estimated 13,400 children living in material hardship in Canterbury (half of whom are living in severe hardship), the impact of cost-of-living pressures may continue to resonate for years to come.
Figures like this are an important reminder of the human face of trends that economists look at. They show how abstract concepts like a “cost-of-living crisis” impact people in real terms.
It’s also a reason why bright spots in the economy are worth highlighting. Positive bumps in the economy can flow through to create more and better jobs. Reversals of negative trends might not be immediately felt, but they are reasons for optimism.
One bright spot is that Canterbury's diverse economy seems to be softening the effects of the economic downturn. A diverse economy helps to moderate the effects of disruptive economic trends, because industries tend to be impacted in different ways. For example, while the services sector suffered due to the absence of tourism during the initial post-Covid period, industries like manufacturing and construction experienced local surges in demand.
We are currently seeing a reversal of this trend. Business NZ’s activity indexes provide a monthly check on whether the manufacturing and services sectors are expanding or contracting. Canterbury’s manufacturing sector contracted in January 2024 – meaning its level of economic activity declined. This follows on from a year-long period where both the local and national manufacturing sectors have largely been contracting each month.
On the flipside, the region’s services sector not only expanded in January 2024, it recorded the highest level of monthly growth in New Zealand. So, it seems that as international tourism begins to recover, the services industry in Canterbury is experiencing a long-awaited boost.
The positive performance of the services sector is contributing to job growth, with employment levels in accommodation and food services surpassing pre-Covid levels by more than 1100 people.
The overall labour market in Christchurch remains relatively stable, with an unemployment rate that aligns with its pre-Covid average. Christchurch’s unemployment rate dropped to 4.2% in the fourth quarter of 2023 – slightly above the national average of 3.9%.
However, the underutilisation rate, which measures additional untapped capacity in the labour market – for example, a part-time worker who wants to work more hours – has been on the rise since early 2023. In Christchurch, the underutilisation rate rose two percentage points to 12.7% in quarter four. This can be attributed to inflationary pressures impacting both businesses and consumers – people might be wanting more work at a time when businesses don’t need more workers.
While monthly indicators show a slowdown in annual food price inflation from December 2023 to January 2024, prices are still rising, just more slowly than they were. Retail spend data reveals that local consumers have responded by reducing spending on non-essential items for several months.
However, as the latest child poverty figures show, for some, cost-of-living pressures have had a more significant impact.