West Coast leads NZ in GDP growth for December quarter

29 February 2024
Development West Coast
The West Coast economy grew 1.1% over the year to December 2023, outpacing the national average of 0.7%.

The region’s economy increased by $28.4m to $2,610m, according to Infometrics latest provisional GDP estimates.

For the December quarter, the West Coast had the highest GDP growth rate in the country at +0.4%. Auckland was the only other region to experience growth (+0.3%), while the national economy contracted at -0.2%.

Development West Coast chief executive Heath Milne said the Coast was able to buck the national trend largely due to increased activity in the minerals sector and the recovery of the tourism industry.

“With Westland Mineral Sands looking to expand south and the TiGa Barrytown project in the final stages of consent the minerals sector should be expected to add significantly to both the West Coast economy and the national economy.”

Milne stresses the strength of the minerals sector has made the West Coast a highly productive region.

“In 2023, each worker on the Coast contributed $172,209 to GDP, well above the national rate of $159,674.”

Employment in the region rose 2.4% in the year to December 2023.

“This equates to 355 new jobs and is the strongest growth the Coast has seen in over a decade,” Milne said.

All three districts experienced job growth, with Westland leading the way at 6.4%. The accommodation and food services industry, buoyed by recovering international tourism, added 145 jobs in the past year.

“A recent dip in job advertisements and an uptick in Jobseeker support recipients signal potential headwinds for our labour market,” Milne notes.

Job advertisements on SEEK for the West Coast fell 20% in the December 2023 quarter, and Jobseeker support recipients rose 6.0%. The West Coast’s unemployment rate remains at a very low 3.3% for the year to December 2023, compared to the national average of 3.7%.

Milne said the region isn’t immune to the economic pressures mounting across the country, but remained optimistic with some significant projects in the pipeline for the region.

House values in the region rose 4.7%pa in the December 2023 quarter, while national values fell 2.2%pa. Despite the modest rise, the West Coast remains the country’s most affordable region for housing, with the average house value of $375,900 amounting to 3.5 times average household incomes.

"Last year the agriculture sector faced significant pressures, with the challenges of low dairy and meat prices compounded by high input costs,” Milne said. “But recently we are seeing some improvements, and it’s great to see Westland Milk Products investing heavily in their Hokitika plant.”

Dairy price declines have moderated, but Infometrics expects the West Coast’s 2023/24 dairy payout to be down $46m. Farm input costs have almost stopped rising, but the double-digit increases of previous years have not been unwound.

During 2023, the West Coast had the biggest increase in tourism expenditure in the country, with a 30.6% rise compared to the national rate of 9.2%. Guest nights in the region also jumped by 48.5%, above the national rate of 26.6%.

Milne said while the return of international visitors has been a godsend for the industry, it is the strength of domestic visitors that has enabled the region to outperform the national rate.

“During Covid, Kiwis discovered the Coast, and thankfully they’ve decided to keep coming here. We’ve also been running a successful campaign, ‘Pretty Great Actually’, which has been heavily targeted at the domestic market. And most importantly our tourism operators have done an amazing job welcoming visitors."

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