Timaru district experiences ‘sharp fall’ in economic activity

Saturday, 24 August 2024

A drop in transport, construction and manufacturing activity as well as pull back with jobs in the manufacturing, agriculture, forestry and fishing sectors have contributed to the decline, Infometrics says.

Economic activity in Timaru declined 1.3% in the year to June 2024, much sharper than the national fall of 0.2%, according to the latest report by Infometrics.

The economic consultancy said provisional GDP estimates showed the fall had been driven by a drop in transport, construction and manufacturing activity with a pull back in manufacturing, agriculture, forestry and fishing jobs.

Provisional GDP for the district stood at $3.63 billion for the year.

“There’s no doubting we are in challenging economic times at the moment, not only for Timaru district, but nationally, and this is reflected in these figures,” Venture Timaru chief executive Nigel Davenport said.

However, Timaru’s household spending was relatively confident, he said, with consumer spending growing 6.4% over the 12 months and visitor spending increasing 7.1%.

“This shows that people are continuing to spend with our local businesses, and we’re also getting visitors coming to town who are spending.”

Infometrics says the number of those seeking Jobseeker support in Timaru increased 12.3% in the 12 months to June, led by a 25% increase for those in the 18- to 24-year age bracket. The number of those on the benefit for more than a year increased by 24%.

Nationally, electronic card spending over the 12 months went up 1.9%, with the growth slower than the 3.3% rate of inflation over the same period.

“Unemployment (in Timaru district) has risen by 3.7%,” Davenport said, “which is below the national average, but still higher than it’s been for our district for some time.

“There was a small rise in employment of 1% in the utilities, arts and recreation sectors.”

Infometrics said national unemployment was expected to reach 5% towards the end of the year. The figure for the 12 months to June was 4.2% nationally, and 4.1% for Canterbury.

Those seeking Jobseeker support in Timaru increased by 12.3% in the 12 months to June, while Canterbury saw an 11.5% increase and nationally it was 10.9% more were seeking support.

Venture Timaru chief executive Nigel Davenport says, “There’s no doubting we are in challenging economic times at the moment, not only for Timaru district, but nationally.”

Infometrics said Timaru’s increase was led by a 25% increase in the 18- to 24-year age bracket, with those on the benefit for more than a year going up 24%, “indicating that a lack of employment opportunities for existing Jobseekers is driving the overall growth, more so than an increase in new Jobseekers”.

New house construction in Timaru eased by 25% over the year to June 2024, with high interest rates discouraging new mortgages in the district and around the country.

Dwelling consents were relatively strong in the June 2024 quarter, with 46 issued as interest rates eased.

In the housing market, 18% morehouses sold in the year to June 2024 in the Timaru district than the year before, with values up 6.4% per annum in the June 2024 quarter.

Timaru recorded a 5.6% rise in non-residential construction with consents to the value of $69.9m issued, compared to a 10-year average of $53.7m.

There were 1203 new vehicle registrations (which include new vehicles and used imports) in Timaru for the year to June 2024, a decline of 13.8% compared with the 10 year annual average of 1842 cars registered..

Nationally, new car registrations fell 45% in the June 2024 quarter, the biggest decline on record. Data has been kept since 1976.

A total of 445 commercial vehicles were registered in Timaru in the year to June 2024, a 20.5% drop on the previous year and lower than the 10 year annual average of 577.

Tourism expenditure in Timaru rose 7.1% over the year reflecting a shift from domestic to higher-spending international visitors, including cruise visitors.

“For many of our businesses, the coming months will still be challenging with some tough times to navigate, however we are seeing some positive glimmers in some key areas,” Davenport said.