Waitaki economy outpacing NZ’s

Waitaki District Council business attraction and recovery manager Mel Jones says Waitaki is bucking the growth trend.

The Waitaki district is faring better than most economically, according to recent statistics.

The district’s economy grew by 5.4% in the year to June 2022, according to Infometrics provisional Gross Domestic Product (GDP) estimates.

The strong result, well ahead of the Otago region at 2.3% and the national figure of 0.9%, was driven by the primary sector and the flow-on effect to manufacturing and other support service industries.

Growth slowed in the past year, with GDP in the June 2022 quarter only 0.4% higher than June 2021, as rising costs and scarce labour made growth more difficult.

Waitaki District Council business attraction and recovery manager Melanie Jones said while most of the figures were outstanding for the region, 125,000 young people were moving overseas, which exacerbated the difficulties companies were having in attracting and retaining staff.

She said it was important to look forward and find pathways to retain young people.

However, overall it was a very positive result.

‘‘We are bucking the trend at the moment at 5.4% growth, versus less than 1% nationally — we’re not getting the peaks and troughs that the rest of the country is getting,’’ Mrs Jones said.

Councillor Melanie Tavendale said while it was great to see the unemployment rate fall to 2.6% compared with 3.3% nationally, it was important to be aware it created other stresses and the region was struggling with staff recruitment at the moment.

Higher global dairy prices were estimated to have boosted the dairy payout in Waitaki for the 2021-22 season by $64 million to $401 million.

However, farmers were also facing significant cost rises and a large part of the increase would go towards servicing higher input costs — especially feed, fuel and fertiliser.

Waitaki’s growth was an indication of the strength of its primary sector, Mrs Jones said.

Cr Bill Kingan said the global dairy price has a huge effect on the Waitaki district.

Waitaki consumer spending grew by 2.3% in the year to June, notably behind consumer price inflation of 7.3%.

Consumer spending nationally was flat, highlighting that Waitaki households were doing better than most but were still paring back on their spending in real terms.

Despite the strong GDP growth, key underlying issues continued to impact across the country.

Household budgets remained under pressure, with higher interest rates eating into budgets.

In July, inflation hit a 32-year high at 7.3% and the Reserve Bank has now raised its interest rate to 3%, the highest since 2015, to rein in inflation.

Businesses continued to struggle with intense cost pressures, persistent supply chain issues, staff shortages, and ongoing Covid› 19 issues.

There were job vacancies across sectors and wages were rising.

Wage inflation was 3.4% in the year ended June 2022, increasing in response to the tight labour market. Recent reduction in fuel prices was bringing some relief to businesses and households.

Waitaki’s employment was up 2.8% over the year to June, driven by manufacturing (250 more jobs) and to a lesser extent construction (58 more jobs), and wholesale trade (48 more jobs).

The average unemployment rate in Waitaki fell to 2.6% in June 2022 (compared with 3.3% nationally), down from 4% a year ago.

About 618 people received Jobseeker Support, down 10.3% over the year to June, versus a 9.7% decline nationally.

In the housing market, Waitaki was relatively resilient during the last year — house values rose 21.5% compared with a 9.6% rise nationally and 13.3% in Otago.

House prices were starting to turn negative nationally and the market has slowed in Waitaki. House sales decreased by 27.2% (versus a 26% decline nationally) in the year to June.

The average house value was $497,075 in June, compared with $1,009,662 in New Zealand and $978,444 in Otago.

Local real estate agents were reporting an increase in out›of› town inquiries and the district’s relative affordability was no doubt a key factor.

Waitaki Mayor Gary Kircher said the district was going well and it was important to acknowledge that.

‘‘Some quite impressive growth has happened over the last year.’’