September Quarterly report shows a drop in GDP, while consumer spending grew over the year

22 November 2024

New economic figures out for Timaru District show a small drop in GDP again, for the year to September 2024, but consumer spending over the period has remained solid until the last quarter.

The Quarterly Economic Report from Infometrics produced for Venture Timaru shows consumer spending in the September quarter dropped to just 0.5 percent growth, but when the spending is looked at over the 12 months to the end of September, overall it grew by 4.8 percent.

The consumer spending figures used for Infometrics reports are from electronic card transactions measured by Marketview which takes into account a wide ranging spending including retail, hospitality, fuel and groceries.  This compares with Worldline figures released earlier this month in the Timaru Herald which are for retail transactions only on bankcards, excluding hospitality.

“It’s important to delve into the figures to get more of a picture of what’s going on for our economy and one thing for sure is we are not alone nationally  in having a drop in GDP,” said Venture Timaru chief executive Nigel Davenport.

“The consumer spending shows, that while things have got tighter, people in our district have continued to spend over the year, although rising prices will also have had an effect on this.  But when we compare our region with the rest of Canterbury (increase of 1.4 percent), we are ahead for spending, and also for the total figure for the rest of New Zealand (increase of 0.5 percent),” he said.

The GDP result showed a drop of 0.9 percent for Timaru District in the year to September, compared to an increase in the wider Canterbury area of 0.3 percent. Provisional GDP for the year to the end of September totaled $3,630m.

The report says that weakness in transport, construction, wholesale and manufacturing has contributed to the weak GDP result. Employment levels stayed steady, as did unemployment at 3.7% while NZ grew further to 4.4%. Noting the closure of the Alliance Smithfield plant will only begin to register in the December figures onwards.

“There’s been a big surge in non-residential consents, up 32 percent in the year to September, worth $89.9m which shows some optimism and that will potentially be good news for our construction industry, if the projects go ahead and involve local businesses,” said Davenport.

The outlook for agriculture has also started to improve, most notably with Timaru dairy farmers expected to receive an additional $98m this season, taking the annual pay-out to $525m.

“We know that the effect of the Smithfield closure will take a toll, but we are see positive news within the economic report, such as the increase in non-residential consents and the dairy payout forecast.”