Economic boom has issues
The Timaru District’s economic growth has outpaced national figures for the second consecutive quarter, but the chief executive of the district’s economic and tourism agency warns challenges remain.
The latest data, collated by analyst firm Infometrics, shows that according to its provisional GDP estimates for the 12 months to the end of September, the district’s economy grew by 3.8%, outpacing the national growth of 2.6%.
The figures follow the district’s economy growing by 5.1% in the 12 months to the end of June 2022, outpacing the then national growth of 0.9%.
Venture Timaru chief executive Nigel Davenport said achieving two growth periods above the national figure is a great performance, but there are challenges – and one of those is the continued drop in unemployment.
‘‘There’s little spare capacity there for getting people into jobs, which is hugely challenging for all our businesses.
‘‘Across the board, through every sector, employers here need staff and recruiting is an ongoing challenge. It’s something that is also happening right around the country, but we’re particularly feeling it with our strong economic growth,’’ Davenport said.
South Canterbury Chamber of Commerce chief executive Wendy Smith said the results ‘‘yet again’’ demonstrate the Timaru District’s stability and growth.
Smith said that was based on ‘‘our agricultural production and value-added processing, and of course backed by a suite of experienced and technically competent
‘‘Across the board, through every sector, employers here need staff and recruiting is an ongoing challenge. It’s something that is also happening right around the country, but we’re particularly feeling it with our strong economic growth.’’
Nigel Davenport
Venture Timaru chief executive
support industries’’.
‘‘Unlike other more bullish metropolitan economies, that suffer from peaks and the associated and unavoidable troughs, the Timaru District continues to deliver,’’ Smith said.
‘‘The economy is, however, suffering from a shortage of workers and across the board businesses are unable to develop at the speed or capacity that is needed.’’
Smith said the Chamber is seeking changes to the skilled migrant settings as businesses grapple with this ongoing challenge.
Davenport said while national house prices have eased, on the back of rapidly rising interest rates with a drop of around 2%, Timaru’s house values have avoided a similar trend and are still increasing.
Timaru’s house prices were up 8.1% in the September quarter. The current average house value for the district is now $512,315, compared with $731,475 in the Canterbury region and $964,202 nationally.
‘‘We still, however, continue to suffer from lack of diversity in our housing sector with a key factor in anyone deciding to relocate here for work being the availability of a variety of housing options from which to choose,’’ Davenport said.
‘‘To compete with other areas, we need more than our traditional house and land packages.
‘‘We need to enable and progress inner or near city living with apartments and townhouses. Venture Timaru will continue to actively advocate for an enabling environment to make this happen.’’
Davenport said there is confidence in the community, with consumer spending growing over the period by 7.9%. By comparison, national growth in spending was at 7%.
‘‘Generally, the feeling in the community appears pretty positive, and while we still need more people into jobs here, those working are doing OK.
‘‘On top of that we have some big projects coming up including the Scott Base redevelopment build, so it’s important we continue to work hard to attract new staff to our region.’’
He said visitors are also coming back, with an increase in guest nights at commercial accommodation providers of 2% and an increase in visitor spending of 5.7%, which is above the rate recorded in the Canterbury region (5.3%) and well above the national figure of 3.3%.
The total tourism expenditure in the district was approximately $168 million during the year to September, up from $159 million a year ago.
The Infometrics report said the dairy payout is forecast to taper off slightly this season, knocking $7m off Timaru dairy farming revenues. Rising input costs may see profit margins decrease from last season.
On a national scale, the report said economic activity remained elevated across New Zealand in the September quarter, ‘‘driven by stronger tourism activity and still-solid household spending’’.
‘‘Provisional Infometrics estimates suggest a 5.4%pa rise in quarterly economic activity, partially due to the comparison with the Delta lockdownaffected September 2021 quarter, with Auckland activity rising considerably as a consequence.
‘‘Annually, the economy looks to have expanded 2.6%, despite the limitations on the labour market in more recent times, higher inflation, and concerns for lower economic activity as interest rates rise.’’