Economic activity in Nelson is growing at a healthy clip according to Infometrics’ June 2015 quarterly economic monitor and, with improving returns in the broader region’s primary sector and increasing air connections set to stimulate business and visitor activity, this period of robust economic growth looks set to continue.
Infometrics Senior Economist, Benje Patterson says “Nelson’s economy grew by 3.1% over the year to June 2015, which was the fifth fastest out of New Zealand’s sixteen regions.
“Economic growth in neighbouring Tasman is also healthy, with Tasman’s GDP having expanded by 3.2% over the June year.”
Growth in economic activity is broad-based across most indicators of spending and investment, with firms also becoming increasingly confident to take on new staff.
Patterson says “Nelson’s unemployment rate has eased to close to 4.5%, compared with a peak of 5.2% in December 2012.
“Further evidence of these improving job prospects can be seen in the reduction of people claiming jobseeker benefits, as well as the soaring level of inbound net migration into Nelson.”
Infometrics’ report shows that Nelson house prices climbed 3.2% over the year to June.
Patterson says that “Although building consents in Nelson remain soft, rising consent numbers in Tasman are keeping local builders busy.
“Furthermore, lower mortgage rates, coupled with improving business conditions, will continue stimulating interest in the Nelson/Tasman region’s housing market over the coming months.”
Although Marketview data shows sluggish growth in the value of electronic spending on retail purchases in Nelson, this is partly due to new retail developments in neighbouring Tasman capturing more spending.
“Nelson households are showing a willingness to splash out on big ticket items, as evident by the large volume of car sales over the past year,” says Patterson.
The outlook for Nelson is also bright.
“Nelson will avoid many of the economic problems afflicting other parts of provincial New Zealand due to a relatively low exposure to dairying across the broader Nelson/Tasman region.
“The lower New Zealand dollar is stimulating returns for seafood exporters and businesses exposed to the horticulture sector, as well as encouraging more visitors to the area,” says Patterson.
Guest nights in Nelson climbed 3.9% over the past year and the recent sharp lift in air capacity to Nelson will further stimulate visitor numbers.
“Jetstar, Originair, and Kiwi Regional Airlines’ recent decisions to begin flying into Nelson are also votes of confidence in the region’s economic and tourism outlook,” concludes Patterson.