Economists predict 'rosy' year for Marlborough
The Marlborough economy is well placed to weather most economic challenges during the next 12 months, economists say.
Export growth from the wine industry, as well as growing international tourism trends, especially from China, is expected to help insulate the region from economic issues, such as the low dairy payout, facing larger regions.
Infometrics senior economist Benje Patterson and ANZ chief economist Cameron Bagrie each spelled out a positive outlook for Marlborough over the next year at separate meetings in Blenheim.
Patterson met Marlborough District Council staff and councillors on Monday to analyse quarterly report statistics for the Marlborough region.
On Tuesday, Bagrie addressed business leaders at an ANZ Bank-sponsored business breakfast at the Clubs of Marlborough.
Patterson said returns from wine, horticulture, tourism and sheep and beef sectors were proving invaluable for growing the Marlborough economy.
Figures showed Marlborough's gross domestic product increased an average of 3.8 per cent per year over the past two years, led by wine production, real estate, construction, agricultural support and specialised food retailing, compared to the national average of 3 per cent.
The region's unemployment rate of 4.4 per cent was lower than the national unemployment figure of 5.7 per cent.
"Marlborough is bucking the trend affecting other regions which have been reliant on dairying."
Export prices in New Zealand dollar terms for meat, fruit, seafood and wine had increased between 5 and 20 per cent over the year to July, compared to dairy and forestry exports which were down between 10 and 20 per cent.
Tourism was poised to overtake dairying as the country's biggest export earner, benefiting Marlborough over the next year at least, he said.
The Marlborough tourism sector accounted for 4.7 per cent of the region's GDP, compared to 3 per cent nationally, and grew by 3.6 per cent in 2014.
The 25 per cent fall in the exchange rate would help attract more tourists with more spending power, and longer stays, from the United Kingdom, the United States and China, he said.
Marlborough's strong employment market, and more affordable housing, had attracted more people to live and work in the region in the past two years, compared to 2010-2013 when more people left the region than arrived.
ANZ Bank chief economist Cameron Bagrie was equally optimistic for Marlborough's economic future 12 months out.
Bagrie said four major economic issues could help Marlborough's economic growth.
He described the low dairy payout, Auckland's speculative housing market, the Christchurch rebuild, and China's volatile "500 pound gorilla" economy, as "unruly children".
All four needed micro management but would ultimately influence regional growth, he said.
"The Marlborough regional economy is in good health.
"Low interest rates and a low New Zealand dollar will act as a massive steroid injection for the region."
The region's viticulture, seafood and horticulture sectors all "looked rosy", he said.
"The dairy sector's pain has become the non-aligned dairy export sector's gain and will help relocate growth to other parts of the country."
Construction and labour supply would move back to the regions after the peak of the Christchurch rebuild.
Auckland home owners were continuing to sell with the flattening of the Auckland property market in the past three months, he said.
Money was starting to come back to the regions as Auckland property prices became stretched out and people realised it was uneconomic trying to get on the property ladder in Auckland.
Regional growth should be led from within the region and supported by central government, Bagrie said.
- The Marlborough Express