A year ago Hawke's Bay was dancing in the streets (so to speak) as NZ's top performing regional economy. It's now slipped to 11th. Photo / Paul Taylor
A year ago Hawke's Bay was dancing in the streets (so to speak) as NZ's top performing regional economy. It's now slipped to 11th. Photo / Paul Taylor
Hawke's Bay's economy has been hit harder than most by coronavirus jitters, a new survey shows.
One year ago, the Bay's economy was the strongest in the country.
At the end of the September 2019 quarter, the region held second place but a challenging three months at the end of2019 saw the region drop to 11th, the latest ASB Regional Economic Scorecard shows.
It's the biggest fall of any region in NZ.
The scorecard measures 16 regional council areas and ranks economies based on which ones are the fastest growing.
The report said retail sales growth had slowed in the region, but given the "boomer growth" over the past year, this was not unexpected. It also noted unemployment had risen 4.8 per cent.
What had hurt most was that the meat and forestry sectors in the region had a "particularly bumpy" start to 2020 to navigate, the report said.
Hawke's Bay fell nine places in the ASB Regional Economic Scoreboard - the biggest mover across New Zealand in the December 2019 quarter. Photo / Supplied
It noted that the region's key industries are in good shape fundamentally.
Hawke's Bay received a three out of five star rating, while Gisborne topped the rankings with five stars.
Ratings are based on measures, including employment, construction, retail trade and house prices.
Business Hawke's Bay CEO Carolyn Neville said the severe drop in the standings could be down to the impact of coronavirus and its effect on trade with China.
"We expect that international visitor numbers could well fall, and the Government's decision to not grant an exemption to Chinese students travelling to New Zealand to study will all impact our local economy.
"The effect on technology manufacturing and other sectors may not be as immediate. "Whether this is a short-term impact, or more sustained, remains to be seen."
Napier Port said its trading performance in the year to date had been in line with expectations, but it expects to see a slowdown in log exports through the port because of the outbreak.
"While we are unable to quantify the potential financial impact at this time, these conditions represent a materially increased risk to the achievement of previous earnings forecasts."
Its share price had dipped 4 per cent to as low as $2.88 on Monday as stock on the NZX generally struggled.
Financial adviser and executive director of Stewart Group Nick Stewart said a "slight pullback" was expected.
Business Hawke's Bay CEO Carolyn Neville said coronavirus has already begun to impact of Hawke's Bay. Photo / File
"We have benefitted from all of our export commodities aligned with strong pricing," he said. "This doesn't happen very often historically.
"In 2020 some areas are being affected as the prolonged dry spell kicks in, and the full effects of coronavirus are felt."
Stewart said there was "still plenty of gas in the local economic tank".
"There is a strong pipeline of projects when you look at a record level of council consents, and inbound migration is still one-way traffic."
Tukituki National MP Lawrence Yule said the region is coming off the back of an historic high, but described the recent drop as "troubling".
"I have been hearing for months that business confidence has been plummeting across a number of sectors," he said.
"Coronavirus is smashing value and production of logs and mutton."
Napier Mayor Kirsten Wise said the city had a "very positive" end to 2019 "economically speaking". Photo / Paul Taylor
Yule added: "At the end of the day, and despite recent record prices for some products this premium has been slashed."
Yule said the region's economy relies on exports. He would be having a public meeting regarding coronavirus at Toitoi Hawke's Bay Arts and Events Centre at 5.30pm on Monday March 16.
However, not all of the region's leaders are concerned at the region's financial position. Napier mayor Kirsten Wise said the city had ended the year "very strong."
Wise said Napier had 3.6 per cent GDP growth for the final quarter of 2019, higher than Napier's annual growth rate of 3.3 per cent.
"Paymark data for the quarter shows the Napier CBD had solid spending growth, with food and beverage spending up 10.9 per cent compared to the same quarter last year.
"We have had a good start to the year, event wise, with events such as the Mission concert and the Art Deco Festival contributing well as always to our primarily domestic tourism market."
Wise added: "Overall, I think Napier has had a very positive few months, economically speaking."
Hastings mayor Sandra Hazlehurst said the district was enjoying a "sustained period of economic growth".
"Our council is experiencing record high levels of consents which is a good indicator of confidence in the economy," she said.
"Almost every week we are hearing from developers and business owners who are bringing new retail shops, hospitality offerings, health care facilities and many more exciting opportunities to Hastings."
Hazlehurst said dry conditions and the consequences of coronavirus could cause economic challenges in coming months.
