Infometrics’ provisional GDP growth estimate for Taupo District saw economic growth accelerate to 4.4% in the September 2018 year.
The District is strong on almost all indicators. Electronic card spending on retail purchases grew 6.1% in the September 2018 year, next to 4.8% nationally. This increase was supported by 6.4% growth in tourist expenditure in the September 2018 year and 4.6% growth in guest nights. The New Zealand dollar’s significant depreciation over the past six months will boost the budgets of visitors to New Zealand this summer season.
Dairy farmers are expected to remain in the black this year. Fonterra’s farmgate milk price forecast for the 2018/19 dairy season is currently $6.25-$6.50/kgms, well above Dairy NZ’s estimate of the breakeven point for the average dairy farmer of $5.50/kgms.
Infometrics estimates that the payout for Taupo dairy farmers in the 2017/18 season was $314m, not too far off the standout $349m in 2014 and well up on last year’s $289m.
The forestry sector remains in a strong position. Export earnings from forestry have moved higher, with a lower NZD a contributing factor. Export volumes also remain high on sustained international demand.
With money flowing into the local economy, local firms are willing to invest. Commercial vehicle registrations rose 2.7% in the September 2018 year, slightly ahead of 2.3% growth nationally. Non-residential consents were up 26%, on a par with the Waikato region and well ahead of 4.9% growth nationally.
The District’s unemployment rate edged down further to an average of 3.4% in the September 2018 year, well below both the Waikato regional and national averages of 4.3%.
The housing market remains relatively flat with sales edging down 0.3% in the September 2018 year and well down on the recent peak in activity two years ago. Despite the fall in Taupo house sales, house price inflation rose again, up 12% in the September 2018
year compared with 8.4% nationally. If residential consents in Taupo remain subdued, this could support continued price inflation.
Residential consents rose for the first time in four quarters but were still down 3.1% in the September 2018 year.