Confidence Grows In North Canterbury Economy

Tuesday, 14 January 2025, 9:29 pm
Article: David Hill - Local Democracy Reporter

The Waimakariri district is well-placed to recover from post-Covid economic uncertainty, says a council manager.

While unemployment is climbing nationally, Waimakariri District Council strategy, engagement and economic development manager Simon Hart is feeling optimistic about the year ahead.

Falling inflation, a strong local housing market and improved business confidence meant the Waimakariri district was in a strong position, he said.

‘‘It is not all doom and gloom as business confidence has shown signs of improvement.

‘‘There are definitely signs the economy will face some strong head winds and will take more time to recover.

‘‘But there are also signs of a little but more optimism and a bit more resilience in the local economy compared to nationally.’’

Inflation dropped to 2.2 percent in September and the Reserve Bank lowered the Official Cash Rate to 4.25% in November.

The unemployment rate rose to 4.8% nationally in September, while in Waimakariri it was much lower at 3.3%.

Waimakariri includes the growing North Canterbury towns of Rangiora, Kaiapoi and Pegasus.

According to Infometrics, consumer spend rose 4.7% in the Waimakariri district in the September quarter, but Mr Hart said this was mainly due to rising prices.

‘‘At first glance you would think people are spending more money, but I think it is more a case of goods and services costing more, rather than increased economic activity.’’

While inflation is falling, it has been much higher, peaking at 7.3% in 2022, meaning people are having to spend more to buy the same amount of goods.

‘‘It is an illustration our economic recovery is taking longer than we thought,’’ he said

But Waimakariri is bucking the national tend in the housing market.

House sales increased 11.2% for the year ending September and the average house value went up 1.8%, while nationally house prices dropped 0.3%.

‘‘House sales are happening more quickly and values are rising, so if you are a home owner it is more favourable than the national average,’’ Mr Hart said.

Waimakariri has a high rate of home ownership which can be ‘‘a double-edged sword’’ as there are fewer rental properties and it made it harder for young people to enter the housing market.

A recent survey conducted by Enterprise North Canterbury (ENC) found local business confidence is at a 10 year high.

ENC business support manager Miles Dalton said the findings were interesting, given the economic uncertainty and high costs.

‘‘Business profitability continues to tighten, with 42% of businesses reporting decreasing profits compared to 20% reporting increased profits.’’

A total of 89% of businesses reported costs had gone up.

Young people are still finding it tough compared to the rest of the population, with the percentage of youth (15-24 year olds) not in employment, education or training rising from 9.2% to 9.8% in the September quarter.

LDR is local body journalism co-funded by RNZ and NZ On Air.

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