Hawke's Bay's construction industry is at a "10 year peak" as consents soar compared to national numbers. Photo / File
Hawke's Bay's construction industry is at a "10 year peak" as consents soar compared to national numbers. Photo / File
Hawke's Bay's economy has experienced a 'sharp reversal' but bright spots among the shadow cast by Covid-19 include a construction sector poised to boom.
Hawke's Bay's quarterly economic report published by Infometrics covers the quarter and 12 months to June 30.
It reveals:
- an 8.2 per cent reduction intourism spending in the region in the June 2020 year - a 14 per cent drop in electronic card spending on retail purchases in the June 2020 quarter - consumer spending was still up 1.3 per cent in the June 2020 year - a 20.7 per cent jump in Jobseeker Support recipients in the region in the June 2020 year.
A shortage of homes for listing has contributed to a 9.8 per cent drop in house sales but prices were up 13.6 per cent pa in the June 2020 quarter.
The region's building sector is poised to boom, with residential consents up 44 per cent in the June 2020 year following strong March 2020 and June 2020 quarters.
Non-residential consents have surged by 60% in the June 2020 year.
This is high compared to the New Zealand averages of an 8.1 per cent rise in residential consents and an 8.8 per cent drop in non-residential consents.
The reports refers to it as a "10 year peak" and said if consents translate into building work, the increases bode well for the regions construction industry and will become a further area of regional economic strength, providing apprenticeships and vocational training opportunities.
Hawke's Bay Master Builders Association president Chris Flude said the boom is reflective of an increase in regional commercial activity and interest in moving to the regions.
"If Covid taught us anything it's that the regions are quite an attractive place to live."
Investment in the region, development of tech companies and career opportunities have resulted in young families moving back to the region. There have also been inquiries from people moving back from overseas, he said.
Nationwide, it's also reflective of an increase in people interested in renovating which Flude puts down to having four weeks at home and money not able to be used for international travel.
Central and local government investment in infrastructure is also contributing to the increase.
There is still an issue with skills shortages and finding qualified tradespeople to is currently the industry's biggest challenge he said.
To further increase building nationwide, he said, Master Builders wants to see the Government help people into building and something similar to the Australian Government's HomeBuilder grant.
"Something like that to stimulate building activity around the country would be very welcome," he said.
Business Hawke's Bay CEO Carolyn Neville said the past quarter has been challenging with lockdown putting "tremendous pressure" on local businesses and people.
"As expected, there has been a sharp reversal in the fortunes of our economy, with many key measures showing either slowing growth or negative growth.
"Despite this, our primary sector strength has insulated Hawke's Bay from the worst effects so far, providing a base level of economic momentum.
Nationally there is a sustained growth in demand for fruit exports with latest trade data showing an 11 per cent pa growth in exports over the June quarter.
The ANZ Commodity Price Index reported that prices for New Zealand apple exports are also up on last year.
Hawke's Bay as a key fruit growing region will be benefiting from this.
Hawke's Bay Fruitgrowers Association president Ben James said there is currently "so much" expansion in the Hawke's Bay horticulture industry.
He said with higher demand for Hawke's Bay products overseas, volumes were "ever-increasing".
With Hawke's Bay well-known for its world-class fruit growing there's a quality tag that comes with it making it appealing for export, he said.
While the region is currently doing better than New Zealand on many measures, there is a concern for Hawke's Bay's long-term outlook and what will happen when Government support finishes, Neville said.
There was an annual average of 6031 on Jobseeker benefits in the year to June, an increase of nearly 600 on the previous quarter.
Neville says that the wage subsidy is helping businesses hold on to their staff.
"Once the wage subsidy rolls off, we expect that many businesses will make the tough decision to lay people off, and Hawke's Bay's unemployment and jobseeker numbers will rise."
Total tourism spend in Hawke's Bay for the year to June decreased by 8.2 per cent, with visitors spending $611 million compared to $666 million the year before.
In Hawke's Bay, car (16.5 per cent) and commercial vehicle registrations (17.5 per cent) decreased year on year, but were still above the 10 year average.
Nationally, registrations fared even worse, with cars down 19.3 per cent and commercial vehicles down 24.6 per cent.
Total tourism spend in Hawke's Bay for the year to June decreased by 8.2 per cent, with visitors spending $611 million compared to $666 million the year before. The tourism spending 10 year average for Hawke's Bay is $556 million.
