23 August 2006

Regional Economic Growth Outlook – “Steady As She Goes”, According To Pwb / Infometrics Report

The outlook for the Wellington regional economy over the next two years is moderate growth, supported by a more coherent approach to fostering business and economic development, according to Positively Wellington Business chief executive Philip Lewin.

In releasing PWB’s latest regional economic outlook update report, Mr Lewin said the pace of the region’s growth had eased to an estimated 1.6 per cent in the year to March 2006, just below the national estimated rate of 2 per cent.

“Just as we cautioned against reading too much into last year’s 7 per cent regional growth figure, we needn’t overreact to this year’s,” said Mr Lewin.

“The growth rate trend for Wellington region’s economy has been somewhere between 2 and 4 per cent and is expected to continue at about this rate for the next two years or so.

“Although this is below the rate that we need, there are some highlights in our review of the past year and in the outlook for the region,” Mr Lewin said.

Regional economic performance had been above the national average in a number of areas, according to the report commissioned from Infometrics by PWB.

The accommodation sector had performed very strongly, with regional guest nights in the year to April 2006 some 6 per cent higher than the previous year.

The region’s construction sector had sustained high levels of activity, particularly for non-residential projects, and the Wellington commercial property market continued to be the strongest in the country.

Other sectors showing dynamism included ICT, creative industries, government services, and business services.

Meanwhile, falls in the New Zealand dollar had improved the export competitiveness of business. Manufacturing, which accounted for 8 per cent of regional GDP, had grown in both the December 2005 and March 2006 quarters. This was principally from efficiency gains, but output growth was expected to accelerate as manufacturers benefited from the exchange rate.

“These are sound results. Also, the soon-to-be-confirmed Wellington Regional Strategy – an exciting new blueprint for the region’s economic development – means that the year 2007 will usher in a more concerted and coherent approach to fostering growth,” Mr Lewin said.

ENDS

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