After a very strong bounce back in the September quarter, Taupo's economy treaded water in the December 2020 quarter.
Infometrics provisional estimates show that the district’s economy did not grow in the December quarter compared to the same quarter in 2019. Over the 12 months to December, which includes the COVID-19 lockdown period, GDP declined by -1.5% compared to -2.6% in the national economy.
The tourism sector contributes nearly 15% to the Taupo economy and, as the sector most heavily hit by COVID-19, has a strong bearing on the local economy. The September quarter was boosted by Kiwis travelling in their own backyard rather than going overseas. However, in the warmer months of the December quarter, when international travellers usually make
up a larger part of the overall tourism market, increased spending by locals was unable to make up the deficit left by overseas tourists.
Total tourism spending in Taupo was down 4.2% over the year to December 2020. Although a disappointing outcome, it was a much smaller decline than in the national economy (-15.6%) and most other tourism destinations in New Zealand which have a heavier dependence on international tourists.
A slower economy has led to a weaker labour market. The number of people receiving Jobseeker Support in Taupo has increased by nearly 40% over the year to December 2020, compared to 36% nationally. Although the weaker labour market has seen Taupo’s unemployment rate rise, the current rate of 3.4% is still well below the national rate of 4.6%.
Taupo’s property market is booming, with the average house value in the December quarter rising by 15.2% to $633,260. Rising prices are encouraging residential building with 78 consents issued in the December quarter against a 10-year average of 61.
Taupo’s agriculture and food processing sectors are a key source of strength in the district. Higher milk prices are expected to lead to a pay-out to dairy farmers of $362m this season, up $4.4m compared to last season.