Local economy ticking along despite ranking
Gisborne's economy is still in good stead, two new economic reports show.
The latest ASB Regional Economic Scorecard shows rising value in most major indicators over the second quarter of the year, with retail sales bringing in $165m — up 28.1 percent on the same time last year.
There was also an increase in construction, up 11.9 percent to $34m, and a big rise in new car sales, up 54.7 percent.
ASB chief economist Nick Tuffley said while the report ranked Gisborne's economy as just the 15th fastest growing region, that number needed to be seen in context.
“After slipping seven ranks last quarter, Gisborne tumbles again, down another six ranks to joint-last.
“That sounds like quite a fall but remember that it comes off the back of a very strong performance by the region over the past couple of years, including a 12-month long spell as the reigning champion of our scoreboard.
“Given our scoreboard measures year-on-year growth, it has a strong cyclical element, with regions that record consistently strong growth slipping down the scoreboard as they run up against capacity pressures, and other regions start to catch up.
“Sure enough, Gisborne eased off the gas on most metrics this month but was still posting year-on-year growth on most scores. The property market in particular remains in good shape, with some lofty house price gains.”
Trust Tairawhiti regional tourism manager Adam Hughes backed that assessment.
“Our economy has been a stand-out performer in comparison to other regions over the past 18 months. This performance is based on a lot of factors that talk to who we are as a region. We are a primary industry-dominated economy with a growing population and less exposure to international tourism markets.
“While it may look concerning for our region to have slipped so many places in comparison, it's misleading as our year-on-year performance is the key to current performance and future potential.
“The key metrics listed in the report are still in positive growth, unlike some of the other regions in the comparison table.
“This shows that the economy locally is still in a solid shape with good balance, although the true potential of the local economy has been and will be constrained with ongoing concerns — for example, housing and labour issues. These were an issue pre-Covid and have not gone away.”
However, supply chain pressure was a worry, Mr Hughes said.
“Also, the uncertainty of future lockdowns continues to have an impact on business confidence and business performance, particularly within the service sector.
“Overall, the regional economy is in a strong position. If we can navigate through some key issues, we will be able to continue the growth trajectory.”
The latest Westpac McDermott Miller Regional Economic Confidence survey, release this morning, shows the region in good shape going forward.
“Confidence in Gisborne/Hawke's Bay's economic prospects bucked the nationwide trend, rising three points to 18 percent in the September quarter,” Westpac's acting chief economist Michael Gordon said.
“The housing market remains red hot, with prices up around 37 percent on a year ago. Meanwhile, the record high farm-gate beef and lamb prices will have boosted the region's farmers still grappling with a lack of rain.
“We largely expect the good times to last although we remain cautious of continued improvement given the labour market challenges that the horticulture sector faces over the coming summer and the region's need for further rain.”