The Economy

The Economy

West Coast Indicators

Economic Performance

This section looks at the Key Performance Indicators (KPIs) taken from BERL’s regional performance database and the National Bank regional performance index.

The database is derived from the Statistics New Zealand Business Directory, the 2006 census, population estimates, and a range of other measures. It is updated annually for the March year. Data is available back to 1994 and so medium term trends can be identified. National Bank New Zealand (NBNZ) also releases an index of economic performance, which is based on 23 economic indicators and released quarterly. The BERL regional indicators are available at the Local Authority (LA) level, whereas the NBNZ index is for the West Coast region.

Table 2.1 presents a range of economic indicators for the latest year.

Table 2.1 economic indicators summary (2007)

Economic Performance	Latest	Previous	West Coast % Change	New Zealand Latest	New Zealand % Change
Real Value Added GDP ($'07m)	1,167	1,163	0.32%	165,379	1.57%
GDP Per Capital ($'07)	37,073	37,121	-0.13%	40,633	0.52%
Employment (FTEs)	13,896	13,491	3.00%	1,845,434	2.04%
Productivity (GDP per FTE &'07)	78,202	80,290	-2.60%	83,475	-0.45%
Business Units (number)	3,854	3,836	0.47%	499,940	1.93%
Buiness Size (FTEs per business unit)	3.61	3.52	2.52%	3.69	0.10%
NBNZ Regional Economic Performance Index	170.9	168.4	1.45%	177.13	2.61%

2.1 Short-term (2007) performance

Table 2.2 presents the annual change in six KPIs for the year to March 2007. Data is provided for the West Coast and each of the region’s LAs as well as New Zealand.

Table 2.2 summary short-term performance (2007)

Economic Performance Indicators (%pa Change 2006 to 2007)	Buller District	Grey District	Wesland District	West Coast	New Zealand
Real Value Added GDP	4.9	-3.5	2.6	0.3	1.6
GDP Per Capita	4.7	-3.9	1.8	-0.1	0.5
Employment	10.8	-1.3	2.8	3.0	2.0
Productivity (GDP per FTE employed)	-5.3	-2.3	-0.2	-2.6	-0.4
Business Units	1.1	1.2	0.9	0.5	1.9
Business Size (FTEs per business unit)	9.6	-2.4	3.7	2.5	0.1

The West Coast region enjoyed strong employment growth in 2007, up 3.0 percent over the year before. This compared with 2.0 percent employment growth nationally. This rapid employment rise, coupled with a relatively slow increase in business units (0.5 percent), resulted in strong increases in average business size (2.5 percent).

Although GDP grew (up 0.3 percent), the change was below that of population (up 0.4 percent), so that GDP per capita fell by 0.1 percent. Meanwhile, labour productivity declined in a national environment of continuing decreases in this indicator.

Across the LAs that make up the West Coast region, Buller and Westland achieved best this year. Buller managed particularly strong GDP growth as a result of a strong rise in employment, notably in mining. This strong employment rise resulted in a significant increase in business size (9.6 percent), as growth in business units was slower (1.1 percent).

The Westland District did better than New Zealand overall across five of the six indicators. Business units growth was slightly under the national average, but GDP, employment and business size rises were well ahead.

The Grey District experienced a challenging year, with all indicators below those of New Zealand. The most positive indicator was the gain in the number of businesses operating in the District, up 1.2 percent.

Sector performance

Employment and GDP data can be broken down into seven sectors for each of the West Coast LAs, the West Coast region and New Zealand.¹

Table 2.3 shows the performance of the three LAs relative to the region and the country.

The West Coast region has experienced employment growth across six of the seven sectors in the last year, and has grown faster than the national average in five sectors.

Table 2.3 employment growth by sector (2007)

Sector Employment Growth (%pa Change 2006 to 2007)	Buller District	Grey District	Westland District	West Coast	New Zealand
Primary	22.2	-23.6	-3.2	-2.1	0.5
Manufacturing and Building	4.8	-1.0	4.7	1.8	-0.2
Accommodation, Cafes and Restaurants	-0.4	13.6	-2.0	2.2	3.3
Retail and Distribution	1.8	-0.1	5.4	1.7	0.7
Business Services	36.0	6.1	16.7	16.7	4.2
Recreation Services	6.0	7.2	13.7	9.1	2.3
Social Services	7.2	4.1	2.3	4.6	4.5
Total	10.8	-1.3	2.8	3.0	2.0

The strongest growth occurred in business services, up 17 percent over the year before, while recreation services, social services, and accommodation, cafés and restaurants also achieved growth rates above the all-industry New Zealand average of 2.0 percent.

Meanwhile, the primary sector saw a fall in employment despite impressive increases in the Buller District. As production at Oceana Gold’s Reefton mine expanded, so did employment. More than 200 new FTEs were added in mining in the District. The District also enjoyed a large rise in business services employment, social services, and recreation services.

The Grey District achieved gains in employment across most sectors, but was held back by a sharp decline in the primary sector.²

The Westland District achieved positive results across five of the seven sectors, with its strongest gains occurring in business services, recreation services, and retail and distribution.

Table 2.4 summarises GDP growth in the region and for New Zealand.

Table 2.4 GDP growth by sector (2007)

Sector GPD Growth (%pa Change 2066 to 2007)	Buller District	Grey District	Westland District	West Coast	New Zealand
Primary	-1.5	-12.8	-4.7	-7.2	0.1
Manufacturing and Building	6.0	-5.2	4.4	0.2	-2.3
Accommodation, Cafes and Restaurants	-2.3	11.5	-3.9	0.3	1.4
Retail and Distributions	4.4	1.3	4.8	3.0	1.1
Business Services	13.9	-4.7	7.0	3.5	3.3
Recreation Services	1.3	7.3	23.5	10.9	6.3
Social Services	5.6	2.9	1.8	3.3	3.2
Total	4.9	-3.5	2.6	0.3	1.6

The region achieved 0.3 percent GDP growth in the year, below the 1.6 percent seen nationally. However, there was growth in six of the seven sectors.

The recreation services sector recorded robust growth of 11 percent over the year, while business services, retail and distribution, and social services also all grew faster than New Zealand’s overall GDP.

The primary sector on the West Coast saw GDP decline by 7.2 percent as employment in the sector dropped.

All three Districts experienced a rise in recreation services GDP, of between 1.3 percent (Buller) and 24 percent (Westland). The three Districts also had GDP gains in social services, and retail and distribution.

Results at a District level were mixed across the manufacturing and building, accommodation, cafés and restaurants, and business services sectors, while all Districts saw GDP in the primary sector decline.

All sectors apart from the primary and social services sectors have enjoyed increases better than the national average employment growth rate of 3.1 percent. In addition, while social services employment gains have lagged those seen nationally, the primary sector has seen employment rise 0.5 percent per annum in a national environment of falling employment.

The Buller District has experienced the most robust increases in FTEs in the last five years, up 4.4 percent per annum. These gains were led by business services (10 percent per annum), the primary sector, accommodation, cafés and restaurants, and recreation services (all 5.1 percent per annum).

Both the Westland and Grey Districts saw primary sector employment decline. They both achieved solid to strong growth in all other sectors except social services, where Westland saw a drop of 1.6 percent per annum.

Longer-term GDP growth at the sector level has occurred within all of the West Coast sectors apart from the primary sector (Table 2.7).

Table 2.7 GDP growth by sector (2002 – 2007)

Sector GDP Growth (%pa Change 2002 to 2007	Buller District	Grey District	Westland DIstrict	West Coast	New Zealand
Primary	-1.7	-3.8	-0.1	-2.2	1.4
Manufacturing and Building	6.4	2.9	5.4	4.5	3.0
Accommodation, Cafes and Restaurants	4.4	2.7	2.9	3.2	3.2
Retail and Distributions	1.2	5.9	6.0	4.6	3.1
Business Services	3.2	2.1	2.4	2.6	3.9
Recreation Services	3.9	5.6	18.1	8.6	4.5
Socail Services	2.4	3.0	-3.8	1.5	3.7
Total	2.0	1.9	3.1	2.2	3.4

The recreation services, retail and distribution, and manufacturing and building sectors recorded the strongest rises in GDP on the West Coast over the five years, with 8.6 percent per annum, 4.6 percent per annum, and 4.5 percent per annum growth respectively.

The picture at a District level was similar. GDP contributed by the primary sector fell across all three Districts, while other sectors grew, except for the social services sector in Westland. Nevertheless, the Westland District enjoyed the fastest overall GDP growth as a result of strong gains in recreation services (18 percent per annum), and retail and distribution (6.0 percent per annum).

Index of economic activity

The NBNZ publishes a quarterly index of regional economic activity. The West Coast Economic Activity Index was 171.5 in December 2007, while the New Zealand Index was 178.0.³

Figure 2.1 shows the NBNZ economic activity index for each quarter back to December 1987.

Figure 2.1 NBNZ economic activity index

Over the last ten years, the West Coast region has lagged New Zealand on the Index. However, the gap has narrowed significantly in recent years, as the figure indicates, from being 9.5 percent behind in the June 1999 quarter, to just 3.7 percent behind in December 2007.

Table 2.8 presents annual averages for the Economic Activity Index for the calendar years from 1993 to 2007, for the West Coast and New Zealand.

Table 2.8 NBNZ economic activity index

NBNZ Indicators	1997	1998	1999	2000	2001	2002	2003	2004	2005	2006	2007
Annual Average
West Coast	127.0	126.2	128.9	133.4	138.9	144.1	150.3	158.5	163.6	168.4	170.9
New Zealand	134.4	135.0	140.0	142.2	147.8	154.5	159.9	166.2	169.7	172.6	177.1
% Change
West Coast	0.34%	-0.65%	2.18%	3.49%	4.09%	3.78%	4.32%	5.44%	3.19%	2.98%	1.45%
New Zealand	2.28%	0.47%	3.70%	1.55%	3.96%	4.53%	3.51%	3.91%	2.11%	1.75%	2.61%

The West Coast region has outperformed New Zealand across six of the last eight years by this measure, averaging 3.6 percent per annum compared with New Zealand’s 3.0 percent per annum.

^{1 For a more detailed dataset on the various industries included in each of the seven sectors, see the Appendices.

2 Note that in Districts with smaller workforces, such as those on the West Coast, data inaccuracies or changes in classification are more likely to have a major impact on results than when considering a larger dataset such as the West Coast as a whole.

3 The NBNZ regional indicators use 23 series to calculate the composite indices of regional economic activity including business confidence, consumer confidence, retail sales, new motor vehicle registrations, regional exports, registered unemployment, building consents approved, real estate turnover, household labour force data, job ads and accommodation survey data. All quarterly rates of change are calculated on seasonally and inflation adjusted data}

Source: BERL 2007

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