Some people may have noticed there seems to be more traffic around the Coromandel this year.
Thames Coromandel District Council says the activity on the region’s roads is a sure sign of the positive trend for our economy.
Data just released by economics consultancy Infometrics reveals the Thames-Coromandel economy expanded 2.1 per cent over the year to June 2019, off the back of sustained population growth, confident households, and heightened tourism activity.
Infometrics senior economist Brad Olsen says the economic outlook is bright, with traffic volumes rising 3.5 per cent over the year, making the Coromandel the tenth-equal fastest growing area in New Zealand by traffic flow.
“Increased traffic flows are a leading indicator of an economy’s strength, with more movements on the roads indicating more economic activity,” Brad says.
The boost in traffic is coming from the Coromandel’s growing population, with local health enrolments (a sign of a growing population) increasing 1.8 per cent annually, on-pace with the national average.
Having more people in the Coromandel, combined with continued household confidence, is behind the 9.1 per cent annual growth in consumer spending, as measured by electronic card data from Marketview.
A strong labour market means that our growing population is still able to find jobs, with our local unemployment rate (3.1 per cent) remaining a full percentage point below the national average (4.1 per cent).
Although our unemployment rate has increased marginally over recent quarters (up from 2.8 per cent a year earlier), the number of our residents seeking Jobseeker Support is growing (up 5.4 per cent) at a slower pace than the national average (9.6 per cent) as the government makes it easier to access income support.
Tourism numbers impress
The number of guest nights on the Coromandel grew by 6.8 per cent in the year to June 2019 – well ahead of the broader Waikato region (2.8 per cent) and for New Zealand as a whole (1.3 per cent). Visitors stayed a total of 831,279 nights on the Coromandel over the year, up from 778,026 a year ago.
Guest night statistics only reflect commercial accommodation such as hotels, and don’t include our larger private market of holiday home rentals.
“Once you take that private market into consideration, the count for guest nights will be even greater,” Brad says.
“The growth is impressive, as we were expecting tourism activity to soften a bit.”
Visitors here are also opening their wallets, spending 10.9 per cent% more than they were the previous year, a much bigger jump in spending than the 3.2 per cent rate for New Zealand overall.
Total tourism expenditure was approximately $404 million on the Coromandel during the year to June 2019, which was up from $364 million a year ago.
The gains are due to strong growth in spending by domestic travellers.
A slowdown on the horizon
Infometrics economists expect the New Zealand economy to slow over the next few years.
“In general, we are expecting the economy will go through what we are calling a long, slow slowdown – nothing on the scale of another global financial crisis, but economic growth will soften,” Brad says.
“So when it comes to economic growth, that story won’t keep improving. It will be more about what regions are slipping away faster rather than those that are growing.”
So, what does that mean for smaller regions such as the Coromandel?
Brad suggests more government spending could be the best stimulant.
"Local government has plenty of projects but just doesn’t have the money. If local councils could get money from central government and get some projects rolling, that improves the number of people employed, puts more money in people’s pockets and therefore more money into the economy," Brad says.
Our Council is pursuing this by supporting applications to the Provincial Growth Fund. We have also developed a Productivity Plan, which outlines how we can partner with central and regional government agencies, local councils, industry, iwi (to facilitate Maori economic development) and the community to catalyse a positive change that stretches outside our normal remit as a Council. You can read more about our Productivity Plan here
At a glance - Coromandel Quarterly Economic Monitor June 2019
GDP: +2.1% ($1,075 million)
Traffic flows: +3.5%
Health enrolments: +1.8%
House sales: +1.3%
Residential consents: -11.1%
Guest nights: +6.8%
Tourism expenditure: +10.9%
Jobseeker support recipients: +5.4%
Unemployment rate: +3.1%