Region's economy expands by 3.7pc
The Manawatu-Whanganui economy grew by 3.7 per cent in 2013, the highest growth for more than seven years, despite a record drought at the beginning of the year.
ANZ's Regional Trends Survey for the December quarter, released this week, shows the region's economy has grown for nine successive quarters, the longest span of consecutive quarterly growth measured since the summary began in the mid-1970s.
But in among the overall economic growth, the summary says some areas, including retail, are struggling. The growth rate remains lower than the national average of 4.4 per cent.
Accommodation is the area highlighted as being the most buoyant, with guest nights rising 7 per cent in Manawatu-Whanganui in the December quarter, a 13 per cent rise on the same time in 2012.
In the rest of the retail sector, spending on the Paymark network was up, but official retail trade statistics reported a 3.3 per cent quarterly drop in sales in the December quarter. In contrast there was a 1.2 per cent lift nationally.
"Retailing is still struggling as customers find new markets [such as the internet] and there are numerous anecdotes of retail shops closing," the summary says.
Vision Manawatu acting chief executive Rodney Wong said the comments on retail struggling were not what he was hearing.
One of the reasons for the overall economic growth was the spending farmers were doing after a good season, and Paymark figures were probably a more accurate gauge of spending, Wong said.
"Even with the drought, the Fonterra payout was so much higher than expected that it almost offset any of its effects.
"The net benefit of an extra $600 million entering the region as a result of that can't be discarded.
"The region is picking up nicely."
Wong said it was possible that overall Manawatu economic growth was even stronger.
"It's hard because we're lumped in with Whanganui, which as a region is very different. I think we are doing pretty well. We don't boom and we don't bust and because of that we don't get massive growth.
"To be up there with the usual suspects like Christchurch is great."
Palmerston North City Council economic policy adviser Peter Crawford said visitor numbers were increasing across the region, with Ruapehu and Palmerston North leading the way, and this was reflected in accommodation bookings.
Business confidence was increasing, but at a slower rate than the rest of New Zealand, and the construction and forestry sectors were on the rise.
- © Fairfax NZ News
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