Supporting local businesses is more important than ever to support the region’s economic health.
The economic landscape remains challenging, with businesses facing a slowdown in consumer spending due to high living costs and falling disposable incomes. This trend is mirrored nationally, indicating broader economic conditions at play. Supporting local businesses is more important than ever to support the region’s economic health.
Despite these challenges, there are positive indicators. The region’s economic diversity and growth in non-residential consents suggest resilience. Global economies are showing signs of recovery, which could positively impact New Zealand’s export values, particularly for dairy and beef products.
The region’s GDP has declined slightly, reflecting wider economic pressures. However, in the past five years, our region’s GDP growth has outpaced the national average. Inflation, though easing, remains higher than desired. Interest rate reductions are anticipated toward the end of 2024 or early 2025 with stubborn domestic inflation delaying hopes of earlier easing by the Reserve Bank of New Zealand (RBNZ).
Palmerston North City Council Economist Stacey Andrews credits the structure of our regional economy for this resilience. “The diversity of our economic structure has supported the GDP performance of the region over the past several years. The regional economy is strengthened by our broad range of sectors with the defence and health sectors making up a significant part of our large public sector.
We also have a greater proportion of big businesses here in the region that are less exposed to economic cycles.
While the region is less vulnerable than many other parts of New Zealand, we are not immune to the current economic slowdown. There will be challenges throughout 2024 and into 2025 as our households and businesses continue to face higher interest rates and elevated costs.”
In the housing market, sales have declined, but prices remain comparably more affordable in our region compared to the national context. Rental prices have risen, further impacting household budgets however Manawatū continues to be a more affordable place to live compared to other regions in the country with home ownership more attainable and rental pricing remains more affordable.
Overall, while the region faces economic challenges there are signs of resilience and positive growth potential.
