7 December 2016

Media release

Economic Outlook Stronger

The latest Manawatū Quarterly Economic Monitor report suggests that economic growth in the Manawatū region continues to strengthen.

Infometrics GDP estimates suggest economic growth in the region was 1.4% in the year to September 2016, while GDP is estimated to have increased by 3.2% nationwide.

Indicators in the report suggest that economic growth in the region will be much stronger in 2017, supported by increased population growth and construction activity.

Net overseas migration in the region resulted in a net gain of 718 people in the year to September 2016 compared with a net gain of 559 people in the year to September 2015. The average annual gain over the last ten years has been 177 people. Net migration in the region increased by 28% in the year to September while the increase for New Zealand was 14%.

This is contributing to strong growth in the construction of new houses in the region. Consents were issued for 392 new residential dwellings in the year ended September 2016, compared with 258 in the previous year, an increase of 52%. National consents increased by 14%.

“The total value of residential and non-residential building consents approved in the region in the year to September 2016 was $224 million, the highest annual total since 2008. We expect this to increase further once consents that were processed by the Council in October and November are incorporated into the official statistics,” says Palmerston North City Council Chief Executive Paddy Clifford.

The Council issued consents to the value of $15.1 million in October compared with $9.8 million in October last year, while November consents were $19.3 million compared with $15.6 million in November last year.

Mr Clifford says that the longer-term outlook for economic growth in the City has also improved significantly since the beginning of the year. The recently announced Defence Force Regeneration Plan identified $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.

Massey University has a Capital Plan that proposes spending about $184 million at its Palmerston North campus over the next ten years. The investment in the construction of Food HQ in 2017 is the first stage of an estimated investment of $250 million over the next 20 years along with other research partners, while another major investment expected to start in 2017 is the construction of the $40 million BUPA retirement village in Napier Road.

Another major project still under development is the Mid Central DHB investment plan, which may result in capital expenditure of more than $282 million in the DHB region over the next ten years, with much of this occurring at Palmerston North Hospital.

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 pncc.govt.nz.

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