Economic update: March 2021
Gross Domestic Product (GDP) continued to fall in the Westland and Grey Districts, and Buller experienced a quarterly decline for the first time since June 2020.
Development West Coast chief executive Heath Milne said the economic impact of COVID-19 has been felt in vastly different ways across the region.
“Westland and Grey are among the four hardest hit districts in the country, with GDP down 9.4% and 4.5% respectively,” Mr Milne said.
“Buller on the other hand has been doing better based on the strength of its primary industries and growth in domestic tourism. However, with a decline this quarter, GDP growth in Buller has slowed to just 0.8% for the year to March.”
Mr Milne said the West Coast’s economic recovery appears to have faltered at the start of the year with the loss of international tourists over the usual peak season.
“Post-COVID, the West Coast has done a great job attracting domestic visitors, with domestic spending up 48% in the March 2021 quarter compared to March 2020. But the reality is domestic tourists can’t fill the massive spending hole left by international visitors.”
According to Infometrics, total tourism spending on the West Coast was down 25% for the year to March 2021, compared to a 16.6% decline nationally.
Tourism spending has been unevenly spread across the region. On the back of the struggles in Glacier Country, spending was down 44.9% in Westland – the biggest decrease in the country. Meanwhile Buller experienced a 7.9% growth in visitor spending - the fifth highest increase out of the country’s 67 territorial authorities.
The number of Jobseeker Support recipients on the West Coast has grown over the past year by 27% but is starting to ease back slightly in Grey and Westland. However, recipients in Buller remain at similar levels to their peak in 2020. 67% of Buller’s Jobseekers have been on the benefit continuously for over a year, which is one of the highest rates nationally. This indicates that Buller’s Jobseekers are having a harder time transitioning back into work.
Employment growth was patchy across the region, with slight declines in Grey and Buller. Employment was up 7% in Westland – the highest rate in the country. Employment in health grew across all three districts, with Westland’s growth driven by construction, education, manufacturing and public administration.
House values on the West Coast have appreciated at their strongest rate in over a decade, with growth of 13.9% in the year to March 2021. This brings the region’s average house value up to $267,847.
The West Coast led New Zealand in house sales growth. Sales volumes were up 41.4% for the region, compared to 13.4% nationally. Buller experienced the biggest increase in sales volumes in the country by some margin with a 93.5% increase, while Westland was second with 42.7%.
The West Coast also experienced strong population growth, as indicated by 2.6% growth in health enrolments over the year to March 2021.
“The growth in house sales and rise in population highlights that the lifestyle appeal of the West Coast has come into strong focus post-COVID,” Mr Milne said.
Workloads for the West Coast’s construction industry may be starting to grow, with strong issuance of residential and non-residential building consents in the December 2020 and March 2021 quarters. Residential building consents are still down on an annual basis, largely due to weak consenting through the June 2020 quarter lockdown.
An improved dairy payout is expected to deliver an additional $29m to the region’s dairy farmers for the 2020/21 season.
Consumer spending on the West Coast was down 7% over the year to March 2021, driven down by the lack of international visitor spending, particularly in Westland.
Mr Milne said despite these challenges there is a lot of positive work going on in the background to support COVID-19 impacted businesses.
“Kotahitanga ki te Uru (working together for the West) became operational in October 2020 with a $13 million funding boost from the Department of Conservation’s Jobs for Nature programme to support COVID-19 impacted businesses to work on nature-based projects.”
The partnership between Te Rūnanga o Ngāti Waewae, Te Rūnanga o Makaawhio, the West Coast Regional Council, Department of Conservation and Development West Coast has to date endorsed/approved $11.1m in funding towards projects that will create an estimated 214 full time equivalent jobs on the West Coast.
“In particular we should acknowledge the great work being done through the Kaimahi for Nature South Westland initiative which has to date helped 40 businesses retain over 100 staff.”
Mr Milne also stressed that businesses should get in touch with DWC to access a range of business support services.
“Over the past year, the team at DWC has allocated over 520 vouchers through the Regional Business Partner network to local businesses for business advisory services worth around $770k.
“Businesses have also been matched with mentors, R&D support, commercial finance and various other forms of business support.”