Region’s economy slowing less than rest of the country’s

A109 Light Utility Helicopter flight with mayor Gisborne City from the air in November 2023.

The Tairāwhiti economy remains “constrained” due to a range of challenging conditions, according to the latest Infometrics Quarterly Economic Monitor.

Provisional estimates show a 1.4 percent fall for the September 2022 quarter compared to last year, while on an annual basis economic activity slowed by 2.2 percent — slightly less than the national average of 2.6 percent per annum.

Persistent and widespread inflation is hitting household spending and means people are getting less from spending more. Data shows a 5.6 percent increase in annual card spending in Tairāwhiti, below the national average of 7 percent and also behind the 7.2 percent inflation rate.

Car purchases are down nearly 13 percent, compared to a 5.3 percent increase nationally.

Strong employment is providing a buffer to the high inflation, with filled jobs up 2.8 percent per annum for the September quarter, slightly ahead of national growth. Annual filled job growth flowed back to 1.9 percent, behind the national average of 3.1 percent, according to Infometrics.

The Tairāwhiti housing market remains stretched with a 5.9 percent increase in house values for the quarter, although there was a nearly 17 percent fall in the number of house sales. Infometrics says local house values are likely to pull back next year, with fewer buyers in the market due to affordability constraints.

Building consents increased by 14 percent locally, ahead of the national growth rate of 7 percent.

The primary sector in Tairāwhiti continues to be affected by a tight labour market and rising costs. Farm expenses have risen 13 percent over the last year, the largest increase on record (since 1993). While commodity prices remain high, the squeeze from high input costs will limit primary sector spending, says Infometrics.

Trust Tairāwhiti general manager of economic development Richard Searle said the region's economic performance had softened more slowly than the rest of the country, largely due to being less affected by Covid lockdowns last year.

“Building activity is particularly buoyant as the regional effort to respond to the housing crisis gathers momentum.

“Consents are close to double the 10-year average. The imminent release of the Oakview subdivision will likely boost this activity further through 2023.

“The number of jobseekers continues to fall, despite a lift in the unemployment rate. Employers say their specific skill requirements are often unable to be met from those seeking work.”

Year-on-year figures show tourism expenditure is down by 2.4 percent, and guest nights are down by 15 percent.

“However, data highlight this decline can be attributed to a quieter summer season when we weren't promoting the region to the level we usually would due to low vaccination rates,” says Trust Tairāwhiti tourism, marketing and events general manager Matt Cairns.

“Daily visitor count and spending have bounced back slowly since March but continue to face a challenge with available visitor accommodation.

“I look forward to seeing how the return of cruise affects the next quarterly report. We have already had three ships so far with another 20 scheduled for the season.

“Cruise is a great opportunity to grow visitor spending without requiring visitor accommodation.”

The full Tairāwhiti Quarterly Economic Monitor is available on the trust website.