Hawke’s Bay economy regains lost ground, outpaces NZ economy
The Hawke’s Bay economy has regained all ground lost due to Covid-19, and returned to growth, according to Infometrics’ latest Quarterly Economic Monitor.
Provisional regional Gross Domestic Product (GDP) for the year to December 2020 grew o.8 per cent compared to the year before, and the -2.6 per cent nationally. Business Hawke’s Bay CEO, Carolyn Neville said this is a marked improvement on the contraction in the June quarter, and the result for 12 months to September of 0.4 per cent growth.
“Hawke’s Bay tops the regional growth tables for economic performance," she said. “At this point, we are doing much better than New Zealand overall. While encouraging, there are concerns such as dry weather, supply chain issues across multiple sectors, and labour shortages for harvest in the coming quarters.”
Other indicators of the region's economic performance are a mixed bag, with the unemployment rate and job seeker support numbers both rising compared to a year ago. Despite this, Neville says the fundamentals of our economy are holding up.
“Strong consumer spending post lockdown and into Christmas is going a long way to underpinning our local economy. Building and construction work is extremely robust, and the primary sector continues to perform well leading into the harvest season. The people of the region are spending locally, supporting local businesses."
Consumer spending is showing no signs of slowing down, with spending up 2.5 per cent for the year to December. In the December quarter, Hawke’s Bay consumers spent $609 million, compared to $577 million for a year earlier.
Looking more closely at spending within the region, $286 million was spent in Hastings, $269 million in Napier, $19 million in Wairoa and $35 million in Central Hawke’s Bay. Neville says money that would have gone to overseas trips is now being spent on jet skis, boats and bigger ticket items for the home.
Infometrics says that nationally the outlook for spending in the upcoming quarters remains relatively "bearish" and that the possibility of further lockdowns may well discourage discretionary spending.
This goes hand in hand with tourism spending which declined by $2 million in the year to December - a total of -0.5 per cent compared to the -15.6 per cent decline for New Zealand overall. Hawke’s Bay has seen few overseas visitors since lockdown.
Neville says the Baycation campaign has been successful in attracting domestic visitors, but the acid test still remains the March quarter.
"The lifting of Auckland’s three-day lockdown and Hawke’s Bay’s return to Covid Level One came too late to save the annual Art Deco Festival, which is yet another blow to our local tourism operators.
“With borders likely to remain closed for the foreseeable future, Hawke’s Bay’s challenge remains to attract New Zealanders to explore our region. Hawke’s Bay Tourism’s new campaign ‘Food and Wine Country’ a comprehensive online guide to Hawke’s Bay’s unmissable eats and drinks, is all about attracting visitors during autumn.”
Perhaps most stark is the number of Jobseeker support recipients, and unemployed. The annual average unemployment for the year to 31 December was up .7 percentage points from the year before, to 5.3 per cent - higher than New Zealand’s overall rate of 4.6 per cent, but still well below Hawke’s Bay’s 10-year peak for unemployment (7.9 per cent in June 2013).
Jobseeker support numbers continue to rise, increasing by nearly 37 per cent compared to the year before, and marginally higher relative to New Zealand. The annual average number of people receiving a Jobseeker support benefit currently stands at 7,118, up from 6,593 at September 30.
“We still expect jobseeker support numbers to ease slightly in the March quarter as seasonal jobs increase over harvest period," Neville said.