Manawatu District Economic Profile

Manawatu District Economic Profile

Our community Population has grown by 1,000 residents since 2014 to reach 29,800. Population is 86.4% European, with Maori 14.3% of the population. This compares with 70% and 14.1% respectively for NZ. Self-employment rate is 26%. This is 10% higher than for NZ (16.6%). Increase in school rolls of 1.5% to July 2016. This compares with 1.4% for NZ & 1.8% for the Region. 2015 saw 85.5% of school leavers achieving NCEA level 2. This compares with 79.1% for NZ. 8% increase in number of superannuitants since 2014 (6.9% NZ)

The structure of the Manawatu Economy 25% Percentage contribution of Industry to GDP Manawatu versus NZ 20% 15% 10% 5% 0% Manawatu District New Zealand

Manawatu is an attractive place to live Population growth has increased to a twenty year high of 1.7%. This compares with 1% for the Region and 1.1% for Palmerston North. Manawatu District Population : 1996-2016 31,000 2.0% 30,000 29,000 28,000 1.5% 1.0% 27,000 26,000 25,000 0.5% 0.0% 24,000 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016-0.5% Manwatu District Population Percentage change

Strong population growth and favourable economic conditions such as growth in jobs 161 jobs created between 2014 to 2015; low unemployment - 4.2% (Region 5.8%; NZ 5%) accompanied by a reduction in Jobseeker benefits 7.5% (Region +1.1%; NZ -0.04%); increase in 2016/17 forecast Dairy pay out 54% ($151m to $232m); Relatively low petrol prices; and, sustained low interest rates are contributing to an increase in confidence and investment in residential housing, new vehicles & increased traffic flows

Confidence is reflected in increased demand for housing 17% increase in houses sold in the district to the YE Sept 2016. 50 45 40 35 30 25 20 15 10 5 0 Quarterly number of new dwellings consented (2015-2016) March quarter June quarter Sept quarter December quarter March quarter June quarter Sept quarter 2015 2016 38% increase in consents Sept quarter 2016 compared with Sept quarter 2015. June quarter 2016 saw a 91% increase in consents issued compared with June quarter 2015.

and an inevitable increase in average house prices Regional comparison: Change in average house price (2012-2016) 400,000 25.0% 350,000 300,000 20.0% 250,000 15.0% 200,000 150,000 10.0% 100,000 5.0% 50,000 0 Ruapehu Whanganui Rangitikei Manawatu Palmerston North Tararua Horowhenua 2012 2013 2014 2015 2016 Average price change: 2012-2016 0.0%

Growth in vehicle purchases reflects local confidence Registration of new cars and commercial vehicles has increased by 14% and 17% respectively to the YE Sept 2016. This growth significantly exceeds both regional and national growth figures. Growth demonstrates that residents and businesses are confident in the decision to invest in high value items, rather than delay spending.

Things to watch Annual average GDP growth for the district fell short of both regional and national growth at 1.6% compared with 2.1% and 3.2% respectively. Decline in retail trade of 0.2% (Region +1.7%; NZ +2.7%). 16% decline in $ of non-residential consents (Region -23%; NZ +6.8%) 9.1% decline in guest nights (Region +1.1%; NZ +6.2%)

Things to consider Strength of our primary sector & increasing returns to Dairy Economic resilience Relative affordability of fuel supporting increase in traffic flows National growth in Tourism National job growth in knowledge intensive industry Growth in Health Care and Social Assistance and Professional, Scientific and Technical Services sectors Role of Local Government in supporting Economic Development

Risks and constraints Global political and market uncertainty Fluctuating commodity prices Global economic transformation toward protectionist trade policies Finance conditions i.e., increasing interest rates, availability of capital Global and domestic debt levels Resource constraints: Labour supply skills shortages and matching skills with demand for labour; outstripped demand for construction materials. Central and local government policy

The future: Manawatu 2038 The population is projected to increase by 4,600 to 34,400 88% of our people will identify as European with 24% identifying as Maori. This compares with 63% and 19% respectively for the nation. 51% of the population will be female vs 49% male The median age will increase from 40.6yrs to 45.7yrs The number of people 65+ will increase by 83% from 5,030 to 9,190 2,600 dwellings will be required to house over 65s The average number of people per household will decline from 2.5 to 2.3

Summary We are unique. We have a distinct demographic and economic structural profile which sets up apart. We are doing well. Record net migration, population growth, and favourable economic conditions are supporting confidence in the economy. There are opportunities supporting business and the community, and capitalising on increased traffic flows There are risks - some we can influence, some we cannot Our community is changing demographic change will impact on future Local Government decision making

Manawatu tourist spending categories Tourist product spend 2016 vs growth in product spend (2009-2016) 12 160% 140% $m 10 8 6 4 2 120% 100% 80% 60% 40% 20% Percentage change in tourist spend 2009-2016 0% 0 Accommodation services Cultural, recreation, and gambling services Food and beverage serving Other passenger transport Other tourism products Retail sales - alcohol, food, services and beverages Retail sales - fuel and other automotive products Retail sales - other -20% Manawatu District Estimated Tourist Expenditure 2016 - Domestic Manawatu District Estimated Tourism Expenditure 2016 -International Total % change 2009-2016

Job creation vs wage growth 7% Job numbers & salary growth - YE June 2015 6% 5% 4% 3% 2% 1% 0% -1% Ruapehu District Whanganui District Rangitīkei District Manawatū District Palmerston North City Tararua District Horowhenua New Zealand -2% -3% -4% % change salary & wages - YE June 2015 % change job numbers (actual filled jobs) - YE June 2015

Housing affordability Housing affordability is calculated by dividing the average current house value to average annual earnings for a defined area. Higher ratios indicate lower housing affordability.

Industry Number of business units % of total business units $ GDP contribution % GDP contribution Agriculture, Forestry and Fishing 1410 37.3% 183.3 21.7% Rental, Hiring and Real Estate Services 830 22.0% 74.8 8.9% Construction 290 7.7% 42.9 5.1% Professional, Scientific and Technical Services 170 4.5% 38.3 4.5% Financial and Insurance Services 153 4.0% 14.2 1.7% Other Services 123 3.3% 10.6 1.3% Manufacturing 110 2.9% 78 9.2% Retail Trade 98 2.6% 38.3 4.5% Health Care and Social Assistance 95 2.5% 34.6 4.1% Wholesale Trade 87 2.3% 34 4.0% Transport, Postal and Warehousing 82 2.2% 23.1 2.7% Accommodation and Food Services 77 2.0% 10.7 1.3% Education and Training 69 1.8% 38.8 4.6% Administrative and Support Services 66 1.7% 8 0.9% Arts and Recreation Services 49 1.3% 6.9 0.8% Public Administration and Safety 42 1.1% 90.8 10.8% Information Media and Telecommunications 16 0.4% 3.8 0.4% Electricity, Gas, Water and Waste Services 9 0.2% 2.8 0.3% Mining 4 0.1% 0.6 0.1% unallocated 62.1 7.4% Owner occupied property operation 48 5.7% Total 3780 100% 845 100%

1600 Manawatu District Business Units 40.0% 1400 35.0% number of business units 1200 1000 800 600 400 30.0% 25.0% 20.0% 15.0% 10.0% percentage of total business units 200 5.0% 0 0.0% Number of business units % of total business units

Percentage of business units versus percentage of GDP 40.0% 35.0% 30.0% percentage 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% % of total business units % GDP contribution

Regional electronic card spend - fuel outlets 25% 20% 15% 10% 5% August June July August September October November December January February March April May June July August September October November December January February March April May June July September October Fuel outlets: Percentage change in annual electronic card transactions 0% -5% 2014 2015 2016-10% Ruapehu Whanganui Rangitīkei Manawatu Palmerston North Tararua

Highlights - Manawatu District Quarterly Monitor Population growth - 1.7% (Region 1%; NZ 2.1%) Average annual unemployment rate Reduction in Jobseeker benefits 7.5% (Region +1.1%; NZ -0.04%) Increase in traffic flow - 4.8% (Region 5.7%; NZ 4.8%) Residential consent growth - 73% (Region 27%; NZ 14%) House price growth - 12% (Region & NZ 11%) Vehicle registration cars 14%; commercial vehicles 17% (NZ 3.2%; 10%) 2016/17 forecast increase in dairy pay out 54% ($151m to $232m)

Employment growth by industry: 2010-2015 Employment and employment growth by industry over the 2010-2015 period 2,500 250 Number of jobs by Industry 2015 2,000 1,500 1,000 500 200 150 100 50 0-50 -100 Employment growth 0-150 Filled jobs 2015 Change in number of jobs - 2010 to 2015

Tourism - Regional Comparison 200 Regional tourism spend 2009-2016 50% 180 45% 160 40% $m 140 120 100 80 60 35% 30% 25% 20% 15% percentage change (2009-2016) 40 10% 20 5% 0 Ruapehu Whanganui Rangitikei Manawatu Palmerston North Tararua Horowhenua Tourism spend 2009 Change in Tourism spend 2009-2016 % change in Tourism spend 2009-2016 0%

Manawatu Tourism Spend Manawatu District: Tourism expenditure (2009-2016) 50 40% $m 45 40 35 30 25 20 15 10 5 35% 30% 25% 20% 15% 10% 5% percentage change in total spend (2009) 0 2009 2010 2011 2012 2013 2014 2015 2016 Year ending October 0% Domestic $m International $m % increase (total spend)

Manawatu Retail Spend From October 2015 to October 2016, spend in the Hardware and Homeware category increased by 12.2% and spending at Bars, cafes and following categories experienced the greatest increases: Hardware and homeware 12.2% Bars, cafes & restaurants 9% While spend in the following categories experienced the greatest declines: October 2016 saw retail spending in Sanson grow by 10.9% compared with October 2015 ($2,151,116 to $2,385,588).

Trade data 1. Australia 1. Milk powder, butter & cheese (-7.3%) 2. China 2. Business & other personal travel (17.7%) 3. European Union 3. Meat & edible offal (3.6%) 4. USA 4. Logs, wood & wood articles (10%) 5. Japan 5. Education travel (16.3%) Dairy cattle farming contributed 9.8% to GDP.