Drop in GDP, but consumer spending tracks upwards

17 May 2024

Timaru District’s GDP has taken a slight fall in the latest quarterly economic report released this week, while conversely, consumer spending is tracking upwards, with a rise of 6.6 percent.

The figures are for year ending March 2024, and have been prepared by the economists at Infometrics for Venture Timaru.

Timaru’s GDP fell 1 percent, while other southern areas including Tasman, Nelson, Ashburton and Westland also experiencing drops in GDP of under 1 percent. By comparison, Christchurch, Southland, Hurunui, Marlborough recorded a small amount of GDP growth of less than 1 percent.

Mackenzie District was an anomaly in the figures, showing growth of 2.8 percent, and Queenstown Lakes, growing 3.8 percent.

The 6.6 percent growth in consumer spending for Timaru outpaces the national spending growth figure of 2.8 percent, according to Marketview data, which Infometrics says reflects solid employment growth and consumer confidence locally.

Guest nights at commercial accommodation providers are also show positive growth, up 5.7 percent in the year to March, and for the March quarter alone, that figure jumps to 14 percent.

Employment has increased by 1.8 percent, and the unemployment rate has also grown, to 3.4 per cent.

“This certainly backs up what we are hearing from the business sector that our traditionally tight labour market has eased a bit with many currently experiencing a good variety of applicants coming through in many roles being advertised,” said Nigel Davenport, Venture Timaru chief executive.

The average current house value in Timaru District is up 0.8% for year ending March, compared to a year earlier, with the average house value now $526,729.

“Overall the recent report is a bit of a mixed bag really, which is certainly reflective of the challenging economic environment – interest rate remains up there, cost of living pressures are being felt by everyone whilst we are also moving into winter months when everyone tends to hibernate a bit,” said Davenport.

“More than ever winter is a good time to buy local and support local business in any way we can,” he said.