Challenging times but there's some “green shoots” of optimism

21 August 2024

Falls in the transport, construction and manufacturing sectors over the 12 months to June have resulted in a drop in GDP for Timaru District, in the latest figures released this week.

The Infometrics Quarterly Economic Monitor shows GDP dropping by 1.3 percent over the period, whereas nationally the drop is only 0.2 percent.  Timaru District’s provisional GDP for the year sits at $3,633m.

“There’s no doubting we are in challenging economic times at the moment, not only for Timaru District, but nationally, and this is reflected in these figures,” said Nigel Davenport, chief executive of Venture Timaru.

But despite the fall in GDP, Timaru’s household spending is relatively confident, with consumer spending growing 6.4 percent over the 12 months and there is also a climb in visitor spending of 7.1 percent.

“This shows that people are continuing to spend with our local businesses, and we’re also getting visitors coming to town who are spending.

“There was a small rise in employment of 1 percent, in the utilities, arts and recreation sectors, but we also see that unemployment has risen by 3.7 percent, which is below the national average, but still higher than it’s been for our district for some time,” said Davenport.

Higher interest rates have had an obvious impact on the number of new house builds in the district over the past year, with these easing  25 percent over the year, compared to a 15 percent drop in all of Canterbury.

Having said that new dwelling consents were relatively strong in the recent June 2024 quarter with 46 issued, perhaps signaling some “green shoots” just as interest rates are starting to be cut. House sale volumes continue to pick up from a trough, with 18% more houses sold in the year to June 2024 than the prior year, with values still rising, up 6.4%pa in the June 2024 quarter.

“For many of our businesses, the coming months will still be challenging with some tough times to navigate, however we are seeing some positive glimmers in some key areas.”. said Davenport.