Update on COVID-19 regional economic impact

Business Survey Results – Impact of COVID-19
21 October 2020
Recognising business innovation and resilience in Palmerston North and Manawatū
15 December 2020
Manawatū-Whanganui Region

Manawatū-Whanganui Region

The Recovery Taskforce has done its job and eight key projects in the region are now all underway –the Taskforce has handed responsibility for regional-scale work back to Accelerate 25 and Te Pae Tawhiti. Numerous shovel ready projects are underway around the region. With a new government being established, the region is looking to engage with new and returning Members of Parliament about its priorities.

On the economic front we recognise that for everyone impacted by the economic and social effects of COVID-19 that impact is very real. While the region as a whole has performed well compared to the overall New Zealand economy, there are indications that localised impacts are being felt in some areas.

At the regional scale, activity to September 2020 declined less than the overall level of decline for New Zealand and the increase in unemployment has been much smaller.

Export conditions for agri-food producers in the region continued to perform well over the year to October, with export values of dairy and red meat increasing by 6.5% and 5.3% respectively compared with the previous year.  Adding to the positive outlook, the value of forestry exports in October 2020 increased by 22.1% compared to October 2019.  This is a substantial recovery from earlier in 2020 and will further support the regional economy[1].  June also saw record terms of trade as the value of New Zealand merchandise exports increased relative to the value of imported goods and services.  Strong global demand for goods produced in the region is adding substantial support to the regional economy, boosting economic performance relative to most other parts of New Zealand.

The outlook over the next year for the region is strong due to the strength of food production in the region and major construction projects already in progress and commencing over the next 12 months.  Key headlines for the region are:

  1. The region’s population has been growing more strongly than initially estimated by Statistics New Zealand, with average annual population growth of 1.4% over the last five years. The region’s population was 254,300 as at 30 June 2020, increasing by 1.5% from the previous year.
  2. The impact of COVID-19 on the region’s economy has been smaller than the impact on the overall economy for New Zealand:
    1. The region experienced stable GDP between the September 2019 and September 2020 quarter, while national GDP is estimated to have declined by 3.2%.
    2. The number of people in the region registered for the job seeker benefit increased by 26.2% between October 2019 and October 2020, while national job seeker benefit numbers increased by 43.1%.
    3. Electronic card retail spending in the region (excluding Horowhenua) increased by 0.4% in the year to October 2020, while New Zealand electronic card retail spending declined by 3.2%.
    4. The total value of building consents issued in the region for the year to September 2020 was $746 million, an increase of $112 million (18.7% increase) from the previous year, while New Zealand consents declined by 1.2% in the year ended September.
    5. Annual tourism spending in the region was $949 million in the year to September 2020, declining by 9.7% from the previous year, while New Zealand visitor spending declined by 16.5%.
    6. There were 108,049 filled jobs in the region in October 2020, an increase of 1,909 jobs or 1.8% increase from October 2019.  National job numbers increased by 1.5%.

 

[1] Dairy product manufacturing, meat and meat product manufacturing, and forestry and logging are the three largest export industries for the region (over 60 %), contributing $2.3 to the regional economy in 2019.