New Zealand Economy

(Top)
Executive Summary

A solid lift in business activity and business confidence continues to point to stronger GDP growth in the second half of 2016 than forecast in the Budget Update.

• Demand in the economy is driven by elevated net migration inflows, housing demand and tourism spending. The export price recovery is expected to continue.
• Annual inflation remained weak in the September quarter, owing to low petrol prices and a reduction in vehicle levies. However, inflation is expected to rise from here.
• International data were mixed but generally positive and expectations of US monetary tightening increased.

Economic data released in October continued to point to faster GDP growth in the second half of 2016 than forecast in the Budget Economic and Fiscal Update. The Quarterly Survey of Business Opinion showed a strong expansion in business activity in the September quarter and a lift in business confidence, driven by the construction and tourism industries. Demand in the economy continues to be propelled by record net migration inflows, housing demand and tourist arrivals, while household retail spending was also solid. All told, data point to real GDP growth in the September quarter of around 0.8%. Read the full report here….
source: Treasury

NZ House sales (Top)

Regions power on as Auckland draws breath.

• New record median sale prices in 4 regions as winter and lack of supply bite into sales volumes
• Four regions hit new record high median sale prices in July, with the national median sale price rising by $5,000 to $505,000, only $1,000 shy of the record median price reached in May 2016, according to the latest data released today by REINZ.
• The Waikato/Bay of Plenty region recorded its eighth record median sale price in nine months, reaching $450,000 (up 2.7% on June 2016), while the median price in Auckland reached $825,000 (up 0.5% on June 2016), Northland reached $376,000 (up 4.4% on June 2016) and Manawatu/Wanganui reached $265,000 (up 6.4% on June 2016).
• Inventory continues to fall rapidly nationwide, with a 33% decline in properties available for sale year-on-year and six regions seeing falls of greater than 40%. Wellington and Hawke’s Bay each have less than 10 weeks of supply available, with Waikato/Bay of Plenty at just on 10 weeks supply.
• At the same time, the number of residential dwelling sales for July 2016 was 7,299, a drop of 7% on June. Sales volumes also fell 10% compared to July 2015, with sales for Auckland falling just over 20% compared to July last year.

Read the Full report here…
source REINZ

NZ Retail Card Spend (Top)
Retail growth has remained steady in September with growth across most of the sectors monitored. The sectors which are still under pressure are furniture and flooring and apparel which were still marginal down on the previous year. Fuel sales values were also down but this is due to a weaker oil price rather then lack of demand which is helping keep inflation at low levels.
Top Categories were takeaways, accommodation bars cafes & restaurants and accommodation which is a consistent trend reflecting the strength of the national tourism sector.

Source Marketview

NZ New Vehicle Sales (Top)
New Vehicle sales in New Zealand have continued to grow and in recent months the 12 month moving average growth has rebound strongly with only negative growth recorded in November and January over the previous year. In September 2015 a total of 8 382 new cars were sold and in September  2016 the figure was up to 9 704 a healthy increase of 0.1%.

Source MIA

Local Economy

House sales have continued to lead the way in the local economy with good sales recorded once again the local indicators we monitor are still showing positive growth which is good for our economy we have also seen an increase in building consents as the housing stock comes under pressure. New car sales have continued to grow with a steady positive trend.

Whanganui and Region House sales (Top)
Sales volumes rose 24% compared to September 2015, with sales rising 68% in Wanganui, 19% in Manawatu Country and 9% in Levin. Compared to August sales volumes fell 6%, with sales rising 7% in Levin and 4% in Palmerston North, but falling across the rest of the region. On a seasonally adjusted basis sales across the region rose 6%, indicating that the fall in sales was larger than normal.
The median price across the region rose $16,600 (+7%) compared to September 2015. Prices rose 27% in Levin, 18% in Manawatu Country, and 10% in Wanganui. Compared to August the median price rose $10,100 (+4%), with prices rising 2% in Palmerston North, but falling 1% in Wanganui and Levin. On a seasonally adjusted basis the median price rose 2% compared to August.
The number of days to sell improved by two days in September, from 30 days in August to 28 days in September. The number of days to sell improved by 10 days compared to September 2015. Over the past 10 years the average number of days to sell during September for the region has been 45 days. There is currently 13 weeks of supply available across the region, a drop of 15 weeks over the past 12 months.
REINZ Spokesman, Bryan Thomson noted that, “Inventory levels continue to rapidly decline across the region with only 13 weeks of supply available, a drop of more than 50% over the past 12 months. Enquiry from first home buyers remains steady with a strong jump in the number of open homes.”

Graph Commentary: The volume trend is continuing to rise. The days to sell trend is now also rising. The overall trend for the region continues   improving.

  

Source MREINZ

Whanganui Card Spend(Top)
The top category this month was Hardware and Homeware with furniture and flooring new entrants showing a positive growth appliances have also shown good growth all of these categories align with the strong property market.

Top 3 sectors were

1. Hardware and Homeware
2. Furniture and flooring
3. Appliances

The bottom three sectors were

1. Fuel (Lower pump prices- which in effect is a positive)
2. Accommodation
3. Apparel (flat and affected by changed market dynamics)

Source Market View
Card spend comparison by region month growth over previous year

Source Market View
Whanganui still had positive growth in September and was third behind Ruapehu and Rangitikei which are both off lower bases.

Whanganui New Vehicle Sales (Top)
In September 2016 new vehicle sales were up on the previous year again with 66 new vehicles sold as opposed to 65 sold in the previous year pushing the moving average growth to 2.2% there are large fluctuations in sales from month to month but the overall trend is still in positive territory. Over the past 12 months only two months (November and December) have shown negative growth. The trend over the longer term still remains positive in spite of the erratic nature of sales in this sector. The moving average car sales has moved from 60 in October to 70 in September which reinforces the fact that this sector has experienced strong growth over the 12 month period.

 

Source MIA

Building Consents – Whanganui (Top)

In September 2016 there were 63 Building Consent applications. Based on a 12 month moving average we have again seen an improvement in value of consents passed with strong growth indicating the individual values of projects in a growth phase.

Source Whanganui District Council