West Coast economy grows by $41 million

The West Coast economy grew by 1.7%, matching the national growth rate, according to the latest provisional GDP estimates from economic consultancy Infometrics.

Heath Milne, chief executive of Development West Coast, noted GDP growth was strongest in Westland (2.8%), significantly boosted by the return of international visitors, followed by Buller (1.9%), and Grey (0.8%).

“On the back of this growth we’ve seen the addition of 406 jobs in the region over the past year,” he said.

Employment in the region grew by 2.8%, significantly faster than the long-term average. Westland district had the highest employment growth rate nationwide, reaching 8.6%. This growth accelerated in the quarter ending September, surging to 14%.

Reflecting the tight labour market, average unemployment across the region eased to 3.2%, below the national rate of 3.5%.

“Job growth has been particularly robust in accommodation and food services with the resurgence of international tourism. The minerals sector has also been strong with around 50 new well-paying jobs over the past year,” Milne said. “This has been somewhat offset by the agricultural sector, which is currently grappling with the dual challenge of falling revenues and rising costs.”

The ANZ commodity price index showed dairy prices down 19% per annum in the September quarter, and meat product prices down 11%pa. Stats NZ’s estimates show farm costs rising 7.3%pa.

The West Coast outpaced the rest of the country with consumer spending, recording a 14.9% increase compared to the national rate of 7.4%. This was led by Westland at 37.4%, followed by weaker growth in Grey (7.6%) and Buller (4.3%).

“The surge in spending is mainly from international tourists returning to Westland, rather than local spending. But, with tourism levels getting back to normal, we’re noticing this growth starting to slow down a bit."

Guest nights in the region grew by 70.4% over the year to September, compared to 48.9% growth across New Zealand.

The West Coast was the only region in New Zealand where house values increased from the previous year. The average house price reached $360,500, which is still less than half of the national average of $908,900.

High building costs and higher interest rates are tempering demand for new housing, leading to a 26% decrease in residential consents.

“This fall is particularly noticeable following a period of high approval rates in late 2022. Despite this drop, the current rate of residential consents remains about twice as high as the long-term average, which is encouraging considering the region’s severe shortage in housing stock,” Milne added.