Feeling the sting of economic slowdown
Wairarapa’s economy is being “battered from multiple fronts”, with major sectors in decline and redundancies creating uncertainty in the workforce, a council has been told.
But despite tough economic times, some of Wairarapa’s social indicators were improving, with criminal proceedings down, housing affordability up, and school attendance rising.
An Infometrics report and a Wairarapa Economic Development Strategy (WEDS) update were included in a South Wairarapa District Council meeting and painted a grim picture for the year to September 2024.
The WEDS report said the Wairarapa economy had slowed in recent months.
“The challenging economic climate includes reduced productivity, higher export prices, shrinking visitor numbers, and consumer spend below inflation.
“Major employers have announced redundancies or closures, creating uncertainty in the workforce and low business confidence.”
The Infometrics report said a decline in construction activity in Wairarapa had been the largest contributor to the slowdown in economic activity, with output from the sector down 6.5% over the year to September. The region’s forestry and wood-processing sectors had also been knocked by a decline in demand for wood in the construction sector and low export demand for logs.
Infometrics estimated local economic activity dropped 1.1% over the year, “well below the national zero growth rate”.
It said the “economic contraction” had been felt across a wide range of industries as the region was “battered from multiple fronts” and that the “weak economy” was flowing through to the labour market.
The unemployment rate in Wairarapa went up to 3.6% in the September year, which was well below the national rate of 4.4%, but up from a low of 2% in June 2022.
There were also 1728 Jobseeker Support recipients in the September quarter, well above the Covid pandemic peak of 1607.
As tough as the economy was, the report said housing affordability in Wairarapa had improved between September 2023 and September 2024, based on the ratio between average house values and household incomes.
It said in the past 10 years, housing was most affordable in Wairarapa in March 2016 when the affordability index reached a low of 3.4. The index was currently 5.2 for Wairarapa and 6.7 nationally.
Rental affordability in Wairarapa had also improved year-on-year, based on the ratio of average rent to average household income, whereas affordability had deteriorated nationally over the same period.
School attendance rates had improved year on year; they were still well below that of 10 years ago. In the year to September, 53% of students attended more than 90% of their classes. This figure was 73% in 2015.
The WEDS plan was also forging ahead in water resilience, primary sector initiatives and workforce development.
WEDS was an agreement between Wairarapa councils and regional economic development agency WellingtonNZ.
Its function was to ensure resources and efforts were aligned to generate positive economic outcomes for Wairarapa.
As part of the strategy, a water capture project had been scoped to identify demand for water across the Ruamāhanga catchment for all users, and to build a “compelling, lasting case for action”.
The case for action was expected to be delivered by June and would build on previous work done around water capture.
Investment was also being made in water security at the Waingawa industrial park, and initiatives for the primary sector were being developed around productivity, diversification, innovation and resilience.