News & Events

Economic outlook stronger

Monday September 12 2016

The latest Manawatū Quarterly Economic report suggests that economic growth in the Manawatū region is gradually improving and the outlook continues to strengthen.

Photo shows military helicopters taking off in formation.

The New Zealand Defence Force plans to invest $176 million in the Manawatū region over the next five years. Photo: NZDF

Infometrics GDP estimates suggest economic growth in the region was 1.0% in the year to June 2016, while GDP is estimated to have increased by 2.7% nationwide.

Palmerston North GDP is estimated to have increased by 1.1% in the year to June 2016 while Manawatū District GDP is estimated to have increased by 0.7%.

Like the previous quarter, two factors influencing the June 2016 quarter GDP estimates for the region are weak commodity prices and subdued retail spending in Palmerston North and Feilding.

The weakness in retail spending is occurring in supermarket and fuel spending, due to competition from a new retail development in the Rangitikei town of Bulls.  

The Infometrics model for estimating GDP uses a range of indicators to provide the latest estimates of economic activity but these are revised as more data is released.

There are further signs of employment growth in the region. The number of Manawatū residents receiving the MSD job seeker benefit declined by 0.8% from June 2015. There has been a higher rate of movement of people off other benefits, such as the sole parent and supported living payment, resulting in a 2.4% decline in total benefits. National benefits declined by 1.8%.

Palmerston North City Council deputy chief executive Ray Swadel says that the longer-term outlook for economic growth in the city has improved significantly since the beginning of the year. The recently announced Defence Force Regeneration Plan identifies $397 million of capital investment in the Manawatū region between 2016 and 2030. $176 million of this is expected to occur over the next five years.  

Another major project still under development is the Mid Central DHB investment plan, which may result in capital expenditure of more than $100 million in the DHB region, with much of this occurring at Palmerston North Hospital. Other projects under development include the $39 million investment in Food HQ and the construction of the $40 million BUPA retirement village in Napier Road.

Net overseas migration in the region resulted in a net gain of 642 people in the year to June 2016 compared with a net gain of 612 people in the year to June 2015. The average annual gain over the last ten years has been 155 people.

This is contributing to strong growth in the construction of new houses in the region.

“The total value of residential and non-residential building consents approved in the region in the year to June 2016 was $217 million, the highest annual total since early 2009. We expect this to increase further once consents that are being processed by the Council are approved,” says Mr Swadel. The value of consents for construction of new houses increased by 40% in the year to June.  

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