Rotorua’s GDP Growth Outstrips National Economy
Friday 1 February 2013
Rotorua’s GDP Growth Outstrips National
ROTORUA 01.02.13: Rotorua has recorded GDP growth of 5% in the year to March 2012, far outstripping the national economy’s expansion of just 2.3%.
Agriculture, forestry and manufacturing, three of the district’s key economic drivers, were the key sectors contributing to the district’s impressive growth performance.
GDP in Rotorua totalled more than $2 billion last year and accounted for 1.4% of New Zealand’s GDP. Over the last 10 years the local economy has grown by an average 1.5%, with a low point in 2009 of -3.5%.
These are amongst a number of findings revealed in a new
annual economic profile on Rotorua, prepared by
Wellington-based economic consultancy Infometrics New
Infometrics says Rotorua’s productivity growth was also well ahead of the national figure, increasing by 4.8% compared to just 1.1% for the whole of New Zealand. Over the last 10 years local productivity growth has averaged 0.6, just behind the national average of 0.7%.
Rotorua Mayor Kevin Winters was upbeat about the results saying they represented some promising signals for Rotorua’s local economy although other economic indicators were less encouraging he said.
“Clearly we haven’t completely turned the corner yet as the national and economic climates continue to be the factors inhibiting our own local economic performance, as is the case in most New Zealand cities.
“However I’m confident that with the our investment in a raft of measures that Grow Rotorua Ltd is focussing on, and programmes underway by our Tourism Committee and Destination Rotorua Marketing combined with other council initiatives, we are setting a strong foundation for economic improvement . We’re certainly optimising opportunities for Rotorua’s future, albeit within a very challenging economic environment.”
The Infometrics report shows that the number of business units in Rotorua declined by 1.3% last year, while the national decline was 0.8%. There were 6,927 business units in Rotorua District, representing 1.4% of all New Zealand businesses.
An average of 32,126 people in Rotorua were in employment in the year to March 2012, up 0.2% on the previous year, with health care and social assistance creating most new jobs since 2001. However the unemployment rate at 8.5% was higher than the national rate (6.6%) which is likely influenced by the larger young population here than for the country as a whole.
Population growth in Rotorua continues to be sluggish. The district’s population increase has averaged 0.2% since 2000 while nationally the average increase was 1.2%. Last year the local population declined slightly, by 0.3%, to an estimated 68,700.
Mr Winters pointed out that the population figures do not include people visiting Rotorua which could often be more than 10,000 on any one day.
“These are tourists and conference and event-goers who in many ways represent extra population numbers as they consume, spend and generally contribute to Rotorua’s economy, just like the local population does.”
The Infometrics report shows the median age of Rotorua’s population was 35.8 years last year, slightly lower than that of the national population at 37 years.
Some 63.7% are of working age (15 to 64 years), lower than the New Zealand figure of 66.1%. The district has a much higher proportion of young people (0 to 14 years) at 23.4% of the population compared to 21% New Zealand-wide.
However there are fewer older people (65+ years) in Rotorua. The local figure is 12.9% of residents against 13.8% nationally.
The median annual income was $44,380 last year, lower than the national average of $49,900. Median earnings increased 3.2% in Rotorua, ahead of the 2.9% rate across New Zealand.
However housing remains significantly more affordable in Rotorua than across the whole country with an affordability index rating of 5.6 compared to the national index of 7.1. The median Rotorua house price was $248,000 in 2012, 33% lower than the national median of $352,000.
Grow Rotorua Ltd chief executive Francis Pauwels said it was great to see that the Rotorua Economy had grown by 5% in the last year.
“As we have seen through revised treasury figures, the country as a whole has benefited primarily off the dairy industry’s performance in recent times. However these results are to March 2012 and there’s been a decline in dairy prices in more recent times. While Rotorua does have a strong diversified economy two of our key sectors in particular - forestry and tourism - are susceptible to factors such as overseas commodity prices and exchange rates.
“Grow Rotorua has commenced a number of project investigations across the district’s four key sectors within an overall strategic direction. These investigations include the major role that iwi can and will play, through investment in growth opportunities and better utilisation of their precious resources. Most people would agree that Rotorua is blessed with abundant resources and a number of comparative advantages.
“Our role at Grow Rotorua is to work with many other organisations to help identify and develop investment initiatives that will underpin even better GDP performance over the coming years.”