North Canterbury Business Opinion Surveys
The North Canterbury Business Opinion Survey is undertaken every six months (April and October) and gives an indication of the mood of our business community. This survey is broadly in line with the NZIER New Zealand Business Opinion Survey which allows us to make comparisons between North Canterbury and New Zealand.
The latest survey took place in October 2024 and shows a sudden increase in business confidence reported by businesses in Waimakariri and Hurunui. The largest increase was about the New Zealand business situation for which confidence increased by 50%. This makes it the most positive our business owners have been since October 2013. Confidence also increased for the individual businesses, their industries and their districts.
This is not reflected in business profitability which continues to decline. Our businesses have been reporting a net decline since April 2020 when covid hit our communities, and we have not seen an increase in overall profitability yet. The main influence in this is the cost of doing business which continues to rise for almost all our businesses. Businesses have had to raise their prices in response, but those we talk to say that they cannot raise their prices enough to mitigate the cost of doing business without losing sales. As such, the decreasing inflation numbers are likely to be a major factor in businesses feeling that 2025 will be a better year.
Finding staff is now a lot easier than it has been in the past with businesses reporting a smoother time in recruiting skilled, semi-skilled and unskilled staff.
Investment intentions remain subdued, particularly investment intentions for buildings.
Overall, the underlying numbers for North Canterbury businesses remain concerning, but growing optimism is a good indicator of better times ahead.
Waimakariri Quarterly Infometrics Report
Commissioned by the Waimakariri District Council, Infometrics provides us with quarterly reports detailing what the economic situation in the Waimakariri is. These reports provide many details on employment, building consents, gross domestic product, accommodation, house sales and prices, and retail and vehicle sales.
The latest Infometrics report for the month ended Septmber 2024 for Waimakariri has been released. Informetrics have provided an excellent summary with this which reflects what we are seeing on the ground. Here is their commentary:
“According to Infometrics provisional GDP estimates, the Waimakariri economy contracted by 0.4% in the year to September 2024. Although this drop illustrates economic weakness, the contraction is much narrower than the 1.1% decline in the year to June. The largest contributors to the decline were construction, the primary sector, and retail trade.
Despite the downturn, there were signs of resilience in areas of the Waimakariri economy. Consumer spending grew by 4.7%pa, one of the few regions where spending grew faster than the national inflation rate over the same period, of 2.2%pa, indicating that residents were spending more and receiving more in return. Tourism spending was also a bright spot as the annual running total of tourism expenditure has grown for 12 consecutive quarters, up 9.2% in the year to September. Guest nights also ticked up 11%pa.
Growth in employment of Waimakariri residents was 1.4%pa over the year to September 2024, faster than the national rate of 1.2%. The largest contributors to this growth were education, healthcare, and other services, with this employment growth offset slightly by falls in construction, forestry, and the wider primary sector.
Trends in the primary sector were mixed as meat prices have improved but remain weak relative to cost increases. Wood product prices are relatively weak due to the downturn in the construction sector coupled with weak overseas demand especially from China. Dairy prices have recovered strongly throughout 2024, with Fonterra recently increasing the farmgate milk price estimate for the 2024/25 season to a midpoint of $9.50/kgMS. The total dairy pay-out for the 2024/25 season is estimated to be approximately $288m, up $53m from the previous season, assuming that current production levels are maintained.
House values in Waimakariri bucked the national trend, rising 1.8% even as the national average fell 0.3%. The average current house value in Waimakariri was just over $708,000 in September 2024. House sales and real estate listings both saw double digit increases in Waimakariri – largely in-line with the national increases – rising 11% and 21% respectively. Residential and non-residential consents continue to trend downwards in Waimakariri due to the economic slowdown and prolonged difficult financing conditions, falling 7.2%pa and 25%pa over the September 2024 year respectively. Non-residential consents have fallen sharper than the national fall, but due to the increases seen over the past year, there remains projects in the pipeline to work through”.
