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17 Aug 2017
Wellington is currently experiencing strong economic activity. The employment rate is up, population growth is at a historic high and the tourism sector is doing increasingly well, making Wellington one of the best performing regions in the country.
According to the official Household Labour Force Survey, in the year to June, an additional 12,650 people in the Wellington region reported they were employed – an equivalent growth rate of 4.6%.
Wellington’s population growth is at a historic high. The 1.6% growth in the year to June 2016 for the region (7,900 additional people) was the highest in 21 years and is expected to be higher still this year.
The region’s population grew by 3,800 in the year to June from net overseas migration alone (people arriving minus people leaving - New Zealanders and new migrants). Whilst data isn’t available yet, there is anecdotal evidence that good numbers of people are coming from other parts of the country, including Auckland which is currently experiencing capacity pressures.
The growing population is a vote of confidence as people are choosing to live in Wellington for work and lifestyle reasons.
Even without the boost provided by the DHL NZ Lions Series, Wellington is one of the best performing visitor destinations in the country. Commercial guest nights have grown 8% in the last two years and are now running at well more than three million annually and that’s in spite of the November earthquake reducing the number of available beds.
The British and Irish Lions tour looks set to boost the numbers further with June 2017 figures showing a $16.7 million or 43% increase in international visitor spending compared with the same month a year ago.
Surveys put investor, business and consumer confidence in Wellington all in the top half of New Zealand regions.
This is contributing to a rejuvenated retail sector which is attracting more and more global brands, certainly in the Wellington CBD, although the figures are less cheerful when taken for the region as a whole.
A growing population, an optimistic mood and, anecdotally, Auckland investors heading south, are contributing to rising house prices in Wellington. According to QV, Wellington house prices increased 18% in the 12 months to June 2017 and annual increases have been running faster than Auckland since the middle of last year.
Increasing population and the tighter housing market is reflected in increased building consents. In the 12 months to June 2017, building consents issued in the Wellington region were 19.6% higher than the previous 12 month period. The equivalent growth figure for New Zealand as a whole is 4.7%.
All of this is undoubtedly positive after several years of below par economic growth, however, we must not rest on our laurels.
For our economic growth to be sustained we need to ensure new businesses and skilled people continue to come to Wellington. And we need to lift our productivity and grow the businesses that are already here.
WREDA is focussed on achieving this by creating conditions for business growth and development and promoting Wellington as a great place to, live and work and do business.
Increased investment is key to productivity growth and the signs here are also positive. Businesses’ own investment intentions, as measured by a number of surveys, are high and the public sector infrastructure investment program currently in place will also contribute to greater business productivity.
All in all the outlook for Wellington and its economy is very sunny, and even the Wellington winter is hotter than you might think!
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