Northland leads NZ in latest post-lockdown consumer spend

Northland Chamber of Commerce chief executive Steve Smith. Photo / Michael Cunningham

The latest post-lockdown business data shows Northland clocked up the biggest increase in consumer spending of any of New Zealand's 16 regions.

Figures for the week ended June 7 — the most recent data available — show consumer spending in Northland almost 9 per cent ahead of the same time last year.

That's 10 times more than the national average of 0.9 per cent.

The consumer spending figures, which were released last week by the Ministry of Business, Innovation and Employment (MBIE), come as a surprise because Northland is also one of the hardest hit regions in terms of job losses triggered by the Covid crisis.

Life starts returning to Whangārei's Cameron St Mall post-lockdown. Photo / Michael Cunningham

Analysis of the MBIE figures show, unsurprisingly, a massive drop in spending during the lockdown compared to the same period in 2019.

In the first full week of level 4 nationwide spending fell by more than half with a drop of 53 per cent. Spending by overseas visitors fell even more, by almost 84 per cent.

The drop in consumer spending in Northland was slightly less than the national average with an initial drop of 44.6 per cent and a low point of -51.8 per cent for the week ending April 26, one month into the lockdown.

The most recent numbers, however, show a strong bounce-back in Northland with consumer spending 8.8 per cent ahead of the same week last year.

The next best performing regions are Manawatū-Whanganui and Marlborough, both of which are above 7 per cent.

The most sluggish regions are Auckland, where spending is down 2.7 per cent on the same week last year, and Otago, where spending is down 3.7 per cent. Otago's spending is likely dragged down by the absence of tourists in Queenstown.

Parking was hard to find at Okara Shopping Centre when the lockdown ended. Photo / Michael Cunningham

Further breakdown of the figures show Northland consumers' spend-up is driven by Whangārei, where the increase on last year is 10.1 per cent.

The figures for the Far North and Kaipara are 7.6 per cent and 4.7 per cent, respectively.

The MBIE figures include part of Queen's Birthday Weekend and reflect the mostly positive reports from Northland retailers and hospitality businesses.

Russell's Duke of Marlborough, for example, was fully booked, though co-owner Riki Kinnaird was still worried about the coming months once Kiwis had shaken off their lockdown cabin-fever by heading away for the weekend.

Initiatives to promote domestic tourism and local spending, such as the Northern Advocate's Go Local! campaign, may have also had an impact.

Northland Chamber of Commerce chief executive Steve Smith said he wasn't surprised by the figures, saying were a result of pent-up demand after the lockdown.

''We've been denied our retail fix so people have gone out for a nice meal or bought a car or a motorbike ... what we don't know is how long that will carry the economy," he said.

"It's great while it lasts — and may it last a bloody long time — but at some point pent-up demand will be satisfied and then you're into normal trading. And if that trading pattern is downwards we have to prepare to defend against a recession.''

Smith said it was all very well for the Government to pin its hopes on domestic tourism but that relied on people being able to take time off and having money to spend.

The chamber was working with businesses to fight a possible downturn. It was also working with sports organisations in a bid to get high-profile events off the ground in Northland, boosting the region's accommodation and hospitality providers.

MBIE's weekly consumer spending data doesn't include all spending but is an indicator of change in expenditure patterns across the economy.

The figures are based on transactions through the Paymark network, the country's biggest Eftpos provide. They don't include cash sales, most online purchases, or businesses such as Countdown that use other Eftpos providers.