In the media
By Tim O'Connell, The Nelson Mail
Nelson’s construction boom has helped fuel its continued run at the top of an economic scoreboard.
For the second quarter in a row, Nelson was the country’s top-performing region in the ASB/Main Report Regional Economic Scoreboard.
Tasman slipped from second to fifth for the March quarter.
The scoreboard ranks the economic performance of New Zealand’s 16 regional councils using the latest quarterly regional statistics on employment, construction, retail trade and house prices.
Booming tourism, horticulture, viticulture and construction drove Nelson’s result.
ASB chief economist Nick Tuffley said combined with high consumer confidence the region was well set for the year ahead.
“When we’re looking at shifts in the economy, we have seen quite a few things that favour Nelson that have been strong of late at a time when you’re seeing other regions facing some challenges.”
Contributing a 1.7 percent share of the national economy, both regions enjoyed a 7 per cent annual growth in employment, as well as a 23 per cent annual growth in new car sales.
Similarities were also being felt in population growth and the average house price, which sat around $540,000.
In the year to March, Tasman’s retail sales have increased by 13 per cent to $179 million. Across the bay, a 9 per cent boost has seen $219 million spent in Nelson stores.
However, construction is where the major difference lies, with the 127 per cent in increase in Nelson in stark contrast to the 2 per cent decrease in Tasman.
“The pipeline of construction work has grown more in percentage terms in Nelson than anywhere else,” the report reads.
“Combine that strength with high confidence and the associated retail strength, and the picture is very positive for the coming quarters.”
Despite Tasman’s drop in the overall rankings, the region was still well positioned to do well from the tourism boom and export sector strength, according to the scoreboard report.
“Like Nelson, consumer confidence is high, and tourists are keeping Tasman’s retailers busy. However, Tasman continues to lag in both the construction outlook and the housing market in terms of turnover.”
Tuffley said this quarter’s results had offered a “balanced picture of growth” throughout the provinces, with Nelson being the biggest example of that.
Strong showings from other regions had also pushed Tasman down the list.
Northland jumped up seven spots to second place on the back of a national tourism boom, while an agricultural recovery in Manawatu-Wanganui saw it gain nine places to fourth place.
“There’s some good outright strengths, when you look at the broader Tasman region for things like employment relatively high consumer confidence and above average retail spending growth,” Tuffley said.
“It’s not necessarily that there’s anything that’s sort of looking astonishingly strong, but there are quite a number of things where Nelson is distinctly above average.”
The March quarter results completed a large reversal for Nelson in the last year. In the March 2016 quarter a “mixed bag” of growing house prices and low job growth and retail sales placed it 11th, just behind Tasman.
Nelson Tasman Chamber of Commerce president Lees Seymour said the results came as no surprise.
“The economy’s going along pretty well and everyone seems to be busy,” he said.
As managing director of Nelson Forests, Seymour said there had been a noticeable lift in forestry and wood products productivity, thanks to demand in new subdivisions and recent expansion at Port Nelson.
“Most of our customers provide products into the building or construction industries so they’re all running 100 per cent capacity and thats flowing through to us as well.”
Seymour said while there were acknowledged constraints posed by labour and skills shortages, the wide range of established industries like horticulture and tourism would serve both regions well going forward.
“Maybe our infrastructure is being pushed a little – but i think its manageable- I don’t think it’s going to fall off suddenly or quickly – the fundamentals are too strong for that.”
“One of the big things we have is we have a very diversified economy in our region and we tend to be pretty resilient – when everything’s going well we do even better than other regions.”
Nelson MP Nick Smith said the report showed Nelson’s economy was on a “positive roll”.
He said the strong economic performance included the lowest unemployment rate at just 2.8 per cent. Building data also showed commercial construction was at a record $70.5 million for the year, up 200 per cent, and and residential construction was at $96 million, up 35 per cent.