Regional round-up - Gisborne and Bay of Plenty
Gisborne has enjoyed annual growth of 2.6 percent to June 2019, putting it slightly ahead of the national average, according to the latest Infometrics Quarterly Economic Monitor.
Infometrics senior economist, Brad Olsen, says meat prices remain high, providing support for farmers in the Gisborne region.
“Forestry prices have dropped back due to an over-supply of logs on Chinese wharves; we expect forestry prices will start to recover by the end of the year,” he says. “The outlook for China remains a concern, given the level of New Zealand exports that China takes, with slowing growth in China and the ongoing tariffs by the US constraining global demand.”
Tourism also continues to grow in Gisborne, bucking the national trend which shows a general easing throughout the country. Instead, Gisborne has seen the strongest regional growth in tourist guest nights, up 6.1 percent per annum, along with a 5.9 percent per annum increase in tourism spending.
Visitor numbers are also strong in the Bay of Plenty, with Tourism Bay of Plenty saying coastal BOP has topped the country’s winter spending statistics.
The Tauranga City Council recently secured nearly $1 million from the Provisional Growth Fund for a new cruise hub and visitor welcome centre. This is in addition to the $4 million the council has already earmarked for the project.
According to an article in The Sun, along with creating 4,000 new jobs, the new hub is expected to drive a 35 percent increase in cruise ship numbers, boosting the amount spent by visitors. Last season, the local economy benefited by about $91 million from the 223,000 cruise ship passengers who visited. https://www.sunlive.co.nz/news/217700-funding-secured-taurangas-new-cruise-hub.html
In the Westpac-McDermott Miller Regional Economic Confidence survey for the June quarter, Westpac chief economist, Dominick Stephens, says economic activity in the region has been running hot.
"The region continues to benefit from favourable conditions for kiwifruit and forestry, still firm construction activity and a strong labour market.
"That said, there are signs that momentum could be slowing. House prices, for example, have slowed markedly in recent months and this is likely to be weighing heavily on households in the region," he says.
Infometrics ranked BOP third best region for annual growth to June, with a rate of 2.9 percent. However, it too warns of concerns about future growth, with a "long, slow, slowdown" expected over the next few years.