Infometrics gross domestic product (GDP) estimates suggest economic growth in the region was 1.9% in the year to June 2014, the strongest increase since September 2010.
The high milk pay-out price, improved migration and strong growth in visitor spending were among the factors supporting stronger growth in the region over the last year.
Alan Cockrell, chief executive of Vision Manawatū, welcomed data showing further improvement in annual net migration in the region. This increase reflects a 30% decline in the number of people leaving the region to move overseas during year to June and a 7% increase in the number of people arriving. It is the highest number for net migration since 2004 and is a useful indicator of increasing confidence in the region.
The reduction in the indicative Fonterra milk solids payout price will have an impact on growth levels in 2015. The company is still completing payments for the 2013/14 season so the impact of the reduction will not be fully seen until next year.
However, investment in the new Proliant processing plant in Feilding and a range of logistics projects in Palmerston North are supporting continuing growth in the region. Projects include New Zealand Post consolidation of its mail processing centre in Palmerston North, and the construction of an inland port at Longburn and several new distribution centres in the City.
Chief executive of Destination Manawatū, Lance Bickford said tourism spending data showed the region continues to experience strong growth in domestic and international visitor spending. “We have put a lot of energy into creating programmes around The Country Road experience to encourage domestic and international visitors to divert off State Highway 1 and these results confirm that we are hitting the mark. Our central location means we are also a great base for visitors to New Zealand.”
While there is a divergence between commercial accommodation international guest nights data and international visitor spending, this is largely explained by the high proportion of international visitor nights in non-commercial accommodation (private homes, B&B, homestays, etc.) in the region.
The Manawatū Region Quarterly Economic Monitor is produced by Infometrics for Palmerston North City Council and a copy of the full report can be found at pncc.govt.nz here.