Hamilton’s hospitality sector received a timely boost from major events as the city continued to outperform the national economy.
Hamilton City Council’s latest quarterly economic update shows the city’s economy grew by almost 4% in the year to June, above the national rate of 3.1%.
The number of jobs in Hamilton increased by 3.1%, while annual spending increased by 12%.
Councilor Ewan Wilson, Chair of the Economic Development Committee, said the quarterly economic update provided unrivaled insight into Hamilton’s economic performance.
“Many small and medium-sized businesses simply don’t have the time or resources to perform data collection and analysis at our scale.
“By sharing this information, the council can support businesses in decision-making and inform them of possible trends in a complex environment,” said Councilor Wilson.
Economic and policy program manager Tiki Mossop said the increase in card spending was well above the rate of inflation and was “somewhat surprising” given the Reserve Bank of New Zealand’s (RBNZ) efforts to rein in spending.
“While spending fell in the June quarter, the overall picture was very good. Fieldays returned mid-year and the Chiefs rugby team held their play-off games and final in Hamilton. All of this brought money into the economy that we didn’t have last year.”
Map data shows spending on hospitality and accommodation rose 28% in the year to June, giving city operators a boost.
Hamilton’s economy also benefited from international tourism, with foreign visitors spending $13 million in the city in the June quarter – $5.6 million more than a year ago.
However, Hamilton households continue to suffer from inflation, with the cost of living for the average household rising 7.2% in the 12 months to June. A key driver of these increased costs was food prices, which rose by 12.7%.
“Mortgage rates have risen and prices for goods and services continue to rise, all putting pressure on households,” Mossop said.
“New Zealand had a technical recession [two consecutive quarters of negative GDP growth] This year, for many people, it will still feel like we are in a recession. Indicators suggest New Zealand will see little or no economic growth in the coming months.”
While industrial approvals remain strong in Hamilton, ending the financial year with the approval of 153,500 square meters of new floor space, residential approvals have slowed.
In May and June of this year, only 101 residential permits were submitted.
“The consents on file tell us what is coming through the pipeline and it is clear from these numbers that the pipeline is drying up,” Mossop said.
For the most part, house prices stopped falling in the June quarter, for the first time since the end of 2021. Homes in Hamilton’s new suburbs sold for a median price of $950,000 – a 1.6% increase on the March quarter. The average price of a home in the city’s existing suburbs fell by $10,000 to $700,000.
Read the full report here
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