West Coast economy grows by 8.4%

23 February 2022
Development West Coast
Despite the ongoing impacts of COVID-19 and flooding in Buller, the West Coast economy grew strongly over the past year.

Provisional data from Infometrics shows the region’s economy grew by 8.4% in the year to December 2021 – ahead of the national rate of 5.5%.

Development West Coast Chief Executive Heath Milne said based on the latest data the region’s GDP rose by $82m over the past year to $2,351m.

This growth was experienced across the region, driven by strong results in Buller (12.3%), Grey (9.1%), while Westland lagged (3.5%).

Employment across the region grew by 4.1% over the year to December 2021 – the highest rate in the country. This resulted in 685 new jobs.

There was a wide divergence within the region, with incredible 9.7% employment growth in Westland countered by 1.2% growth in Buller and nil growth in Grey.

Westland District experienced the highest employment growth rate in the country, despite the ongoing struggles in South Westland.

“South Westland lost 392 jobs during the first year of COVID, which isn’t counted in this year’s data. Since then, the Jobs for Nature initiative has played a massive role in sustaining the workforce in the tourism dependent area,” Mr Milne said.

The top growing industries in Westland were manufacturing, professional services, and health.

“These industries weren’t particularly hard hit by COVID, so the employment growth is genuine rather than simply clawing back losses from 2020.”

“A large part of the employment growth will be attributed to the Government money that’s been injected into the economy, both by way of COVID support and ongoing PGF projects. This is a double-edged sword as we are now seeing the significant impact on inflation”.

Jobseeker Support recipients remain elevated from pre-COVID levels across the region, however, there has been a consistent decrease since the March 2021 quarter, with recipients down 0.2% over the year to December 2021. Jobseekers are coming down more rapidly in Grey and Westland.

House values have grown strongly across the West Coast, up by 29.8% pa in the December 2021 quarter. This places the average West Coast house at $327,500, compared to $1.03m nationally.

Higher prices and interest in the region more generally appear to have coaxed more supply to market.

Sales volumes have picked up 6.5% in the region in the year to December 2021, compared to 3.5% nationally. A total of 627 houses were sold on the West Coast in 2021, well above the 10-year average of 428.

New dwelling consents have nearly doubled in the past year, also sitting near double the 10-year average. Residential consent grew by 89.9% on the Coast, the highest growth rate in the country.

Today’s announcement that Fonterra has lifted its 2021/22 forecast Farmgate Milk Price range to NZ$9.30 - $9.90 per kgMS, up from NZ$8.90 - $9.50 per kgMS, means West Coast farmers are expected to net $103m more this dairy season, compared to 2020/21.

“This is great news for our dairy farmers, it will allow them to reduce debt and invest in their farms. With Westland Milk Products performing well for farmers it’s a great time to invest in dairy on the Coast.”

Mr Milne said while parts of our economy have done well over the past year, the spread of Omicron is expected to disrupt economic activity by restricting workforces, increasing absenteeism, and further stretching supply chains.

“It is important West Coast businesses are well prepared to manage absenteeism and continue operating as Omicron spreads. If a close contact is vaccinated and asymptomatic, they may be able to continue to work if they can maintain a bubble of one or by registering for the close contact exemption scheme.