The provisional gross domestic product (GDP) estimates suggest GDP growth in the region strengthened in the first half of 2015 but the annual average growth rate has remained stable due to weak growth experienced in the second half of 2014.
Infometrics GDP estimates suggest economic growth in the region was 2.0% in the year to June 2015. Palmerston North GDP increased by 2.2% in the year to June 2015 while Manawatū District GDP is estimated to have increased by 1.4%, reflecting the greater impact of the dairy sector on the District's economy. New Zealand GDP is estimated to have increased by 3.1% in the year to June 2015.
Alan Cockrell, chief executive of Vision Manawatū, noted the downturn in the dairy payout is estimated to have reduced dairy farmer incomes by $172 million from the record payout level in the 2013/14 season. The impact of this is seen in the weak growth in the second half of last year. However, other parts of the Manawatu primary sector are now enjoying better conditions as a result of the lower NZ dollar.
Destination Manawatū chief executive Lance Bickford noted it has been a good year for the tourism and hospitality sector. Although the region did not host any Cricket World Cup or FIFA U20 World Cup games, domestic visitor spending in the region increased by 12% in the first six months of 2015, well ahead of national growth of 3%. International visitor spending growth in the region was 11%, just below the national growth rate of 12%.
The region has also experienced strong growth in the value of non-residential building consents issued, which increased by 71% in the year to June 2015. The $43 million increase in the value of consents is providing relief to some of the businesses which service the dairy sector.
One of the great strengths of the region is the diversity of the sectors which drive economic growth. Despite the downturn in the dairy sector, retail spending in the region increased by 2.9% in the June quarter, ahead of the national growth rate of 2.3%.
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 here