MP slams growth rate, despite brighter spots

00:00, Sep 05 2014

Manawatu's economic growth is lagging behind New Zealand on most indicators in the Infometrics quarterly economic monitor for the year to the end of June.

Palmerston North MP Iain Lees-Galloway said the two most striking examples of the region performing poorly against national averages were productivity and building consents.

The gross domestic product indicator showed growth of 1.9 per cent, behind the national average of 3 per cent. Non-residential business consents had taken a 20.8 per cent knock, against the average national increase of 11.2 per cent.

Lees-Galloway said those two features alone were striking, and indicative of a region slipping further behind the rest of the country in the absence of serious government focus on regional development.

But mayor and National candidate Jono Naylor said while the rate was behind the national average, it was still growth.

City council economic analyst Peter Crawford said the outlook was brighter than a couple of selected measures suggested.


"We would have to be doing extremely well to match national trends because of the influence the Canterbury rebuild has on the national average."

Manawatu's 1.9 per cent productivity growth was the strongest increase since September 2010.

But in a relatively rare occurrence, the GDP growth in the wider Manawatu-Whanganui region was stronger, at 2.1 per cent, than in Palmerston North City and Manawatu District.

Crawford attributed that, at least in part, to the near-drought conditions that were experienced more acutely in Manawatu.

The reduction in the indicative Fonterra milksolids payout price was expected to have an impact on growth levels in 2015. Crawford said building consents data was typically volatile. The non-residential building consent slump was more a return closer to base levels after a $25 million boost created by the Ohakea passenger processing facility and a Feilding retirement village.

Vision Manawatu chief executive Alan Cockrell welcomed data showing further improvement in annual net migration in the region.

There was a 30 per cent decline in the number of people leaving for overseas during the year, and a 7 per cent increase in the number of people arriving - the highest net migration since 2004.

Investment in the new Proliant processing plant in Feilding and a range of logistics projects in Palmerston North were supporting growth.

Projects included New Zealand Post's consolidation of its mail processing centre in Palmerston North, and the construction of an inland port at Longburn and several new distribution centres in the city.

Destination Manawatu chief executive Lance Bickford said tourism spending data showed the region continued to experience strong growth in visitor spending.

Lees-Galloway said despite some gains, the report showed Manawatu was not enjoying its share of the benefits of economic recovery.

"It's time for a government to show commitment to the regions, and to allow us to play to our strengths."

Naylor said the Government's investment in a regional growth study would help improve performance.

Manawatu Standard