March 2025 economic update

Economic activity on the West Coast declined by 2.1% in the year to March 2025, according to the latest Quarterly Economic Monitor from Infometrics. While global pressures and infrastructure challenges weighed on the economy, the report points to positive momentum across dairy, housing, and minerals sector employment.

The region’s performance compares to a national GDP decline of 1.1% over the same period. Within the West Coast, Buller District recorded the sharpest fall at 4.3%, followed by Grey District down 1.6%, while Westland District edged up 0.1%.

Development West Coast chief executive Heath Milne said weaker global prices for coal and the flow on effects account for more than half of the region’s GDP fall.

“Coal prices fell 18% over the year, which hit the region hard - especially considering coal mining typically contributes over $200 million annually to our GDP,” Milne said.

“This reporting period also includes the extended closure of the Tawhai Tunnel, which severely disrupted coal exports. It’s estimated to have cost around $35 million in lost revenue.”

Milne said Infometrics’ update reinforces the importance of diversifying the Coast’s mining sector to reduce the region’s exposure to global price fluctuations.

“Federation Mining’s Snowy River gold project is nearing production, and mineral sands developments by TiGa and Westland Mineral Sands are gaining momentum,” he said. “By broadening our mineral base, these projects will strengthen the sector and make our economy more resilient.”

“Each mining job on the Coast contributes over $447,000 to GDP – nearly three times the national productivity rate. As we diversify and grow the sector, there’s a real opportunity to strengthen the region’s economy while delivering national productivity gains.”

Infometrics data also shows strong performance in the primary sector, with lamb prices up 10%, beef up 15%, and the dairy pay-out forecast to hit a record $503 million – a $119 million increase on the previous season.

“The primary sector is a key pillar of our economy. That dairy uplift alone flows through to local spending and job creation,” Milne said.

“We should acknowledge the hard-working people on our farms. Their contribution makes a massive contribution to both the Coast and the national economy.”

Tourism expenditure fell 1.3% over the year, more than the national decline of 0.1%. Milne said the dip followed a particularly strong previous year, so the figures reflect a high starting point rather than a major drop in activity.

“Things were tracking well, but the Knights Point road closure in November disrupted visitor flows at a critical time,” he said.

“We had a strong summer, but visitor numbers dropped off in March with the international recovery slowing and domestic travellers tightening their budgets in a tough economic climate.”

Despite the dip, the region remains above pre-pandemic levels, with visitor spending 6.2% higher than before COVID, compared to 5.1% nationally.

During the year end March 2025, Buller District recorded a 3.3% increase in tourism spend, bucking the national trend.

West Coast house prices rose 1.3% over the year, in contrast to the national decline of 2.1%. The region remains the most affordable in New Zealand, with house values at just 3.6 times average household income, compared to the national average of 6.5.

“The big housing story is in Grey District, where residential consents jumped 107%, while they fell nationally by 3.3%,” Milne said.

“It’s great to see progress on major developments like Paparoa Views at Kaiata Park. Projects like this are essential for easing housing pressure and supporting future growth.”

Employment on the West Coast remained steady, with 0.1% growth compared to a 0.9% decline nationally. The region’s unemployment rate sat at 4.5%, below the national average of 4.9%.

Job growth was supported by the mining and tourism sectors. However, the pace of employment growth has slowed, and the number of people receiving Jobseeker Support has increased. Jobseeker numbers rose 7.7% on the Coast, although this was still well below the 13% national increase.

Youth engagement remains a particular concern, with 15% of West Coast youth not in employment, education or training (NEET), compared to 13% nationally.

“That number reinforces just how important it is to have accessible training options here on the Coast,” Milne said. “Keeping Tai Poutini Polytechnic in the region is vital if we want to give our young people the opportunity to gain skills and build careers without having to leave home.”

Despite economic headwinds, Milne said the region is laying important foundations for future growth.

“Mining diversification, a strong primary sector, and housing developments are all signs of a more resilient West Coast,” he said. “At the same time, the region needs to continue addressing infrastructure challenges that can undermine progress.

“With close to $19 billion in export potential from just six mineral projects currently in the pipeline, combined with a government push to double mining exports, the outlook for the Coast is positive.”