Economy in growth mode prior to lockdown
The latest lockdown may have shaken business confidence but economic data from before the Delta outbreak shows the region's economy was on the rise.
Provisional estimates supplied by Infometrics to regional economic development agency Trust Tairawhiti showed the Tairawhiti economy continued its growth in the three months to June 2021, with quarterly economic activity rising 12.1 percent per annum from the lockdown-affected June 2020 quarter. This result increased 12-month growth to 5.6 percent pa.
Household activity remained firm, with Marketview data showing card spending growth of 21 percent pa in the quarter, leading to 9.9 percent annual average growth.
Underlying quarterly economic activity rose 5.5 percent from 2019 levels, above the national average and middle of the pack among other regional economies. Underlying spending rose nearly 11 percent from 2019 levels, the fifth-highest regional result.
Spending was bolstered by strong employment activity. Quarterly filled jobs for Tairawhiti residents rose 4.5 percent pa — the largest regional increase — taking 12-month growth to 2.8 percent as the labour market tightened.
The annual average unemployment rate dropped to 6.1 percent, with the third-largest regional fall in quarterly Jobseeker Support recipients. Increased forestry, horticultural and hospitality employment has contributed to the rise.
Trust Tairawhiti business growth adviser Ryan Christison says there has been widespread demand for skilled labour.
“It's positive to see the numbers suggesting some of that demand is being met, although there is more work to be done in this area. Many businesses we engage with continue to specify labour shortage and the inability to recruit as their primary challenge.”
The primary sector was strong, with commodity prices for horticultural and forestry products sitting at elevated levels according to the ANZ Commodity Price Index. The NZ dollar index shows horticultural product prices sitting 12 percent higher than a year earlier, and 19 percent higher than in 2019, with forestry prices up 16 percent (vs 2020) and 18 percent (from 2019). There were some indications of prices pulling back slightly from current highs, but the outlook remained robust.
Trust Tairawhiti economic development general manager Richard Searle said impacts from the latest lockdown were expected to flow through the September quarter, due to forestry harvest ceasing during Alert Level 4.
Property market pressure remains high in Tairawhiti, with the average property stock available for purchase over the 2021 year to date sitting at just 31 percent of the long-term average.
Tairawhiti property value increases of nearly 35 percent in the 12 months to August is the third highest regional growth rate after Manawatu-Whanganui and Wellington.
There was an 81 percent increase in dwelling consents in Tairawhiti, with 49 consents in the June 2021 quarter — the highest quarterly consent figure since the end of 2011— compared with 27 in the same quarter last year.
Manaaki Tairawhiti housing project manager Angie Tawera said more work was under way to address housing demand.
“The Government has announced a $380 million Maori housing budget to deliver 1000 new homes for Maori. We believe Tairawhiti will receive a substantial amount of this funding given the work done by iwi to both quantify the need and focus on how that need can be best met,” she says.
“Kainga Ora is also committed to delivering 200-plus houses in the region by 2024, with 22 completed and approximately 70 currently in design and construct phases.
“This is great progress for the region, but we still have a lot of work ahead of us to meet the growing demand.”