Tourism revival boosts West Coast economy

15 August 2023
Development West Coast
Economic activity on the West Coast grew by 3.1% over the year to June 2023, according to economic consultancy Infometrics latest provisional estimates.

This growth pushed the region's GDP up by $73 million, reaching a total of $2,430 million.

“The resurgence in our tourism sector and strong contributions from construction and rental/real estate services have helped keep the economy in line with the national GDP growth rate of 3.1%,” said Heath Milne, the chief executive of Development West Coast (DWC).

Westland District led the region’s growth at 4.5%, followed by 3.2% in Buller, and more modest growth of 2.2% in Grey.

“One year on since the borders reopened, the tourism industry has rebounded strongly,” Milne said.

Tourism expenditure across the West Coast rose by $63m from the June 2022 quarter, with Westland seeing the strongest growth in the country of 96% over the year to June 2023. Tourism spending across the region in the year to June was 8% higher than pre-pandemic levels (June 2019 year).

However, Milne added a caveat, “given inflation rates, this result suggests that actual consumption by tourists is in line with pre-pandemic levels.”

Meanwhile consumer spending on the West Coast grew by 18.4%, above the national rate of 11.8%.

On the employment front, the West Coast had a 1.3% increase in jobs over the year to June 2023. Milne attributed this growth to "accommodation and food services, coupled with the transport sector—both highly linked to the tourism sector." While Westland experienced 3.3% growth in job levels, Buller and Grey saw stable figures at 1.0% and 0.1% respectively.

Despite employment growth, challenges persist for the region. “The primary sector is grappling with mounting pressures, especially after the large drop in the forecast milk payout,” Milne said.

"It is another blow to our dairy industry that will put many farmers under financial pressure.

"The down stream impact will be felt across the region and the country. Farmers will have no choice but to reduce spending which will affect both the retail and service sectors."

Turning to the real estate sector, Milne observed, “The West Coast’s housing market has been one of the country’s most robust.” Defying national trends, the West Coast is the sole region in New Zealand witnessing a climb in house values. Prices have increased by 1.4% since the June 2022 quarter, compared to the 11% drop seen across the nation.

Despite a 21% annual decline, residential consents remain around a third above the five-year average with lots of work still in the pipeline.